Bank on extra charges this year
There's no such thing as a free account for the majority of us as fees hit home
Bank charges are on the rise again with both Permanent TSB and Ulster Bank hiking transaction fees it charges to customers, so this week I'm having a look to see which lender offers the best value banking and how to keep fees to a minimum if you need to operate a current account.
PTSB wants to move people off old legacy accounts which are expensive for the bank to maintain, and onto its Explore current account (fee €48 a year), which it claims is better value. So, it's increasing fees on old accounts as a deterrent/encouragement.
Ulster is changing its charging structure considerably. Up to know, it offered the best value, just €4 per month account maintenance fee, with no additional fees for transactions. From April 19 it will charge €2 per month but add in a whole raft of other fees, and will also start charging for contactless, Google Pay and Apple Pay transactions, albeit at 1c per transaction. Financial experts have long warned that charges for contactless would be introduced once enough customers were hooked on the convenience of tap-and-go.
The bank says the transaction charges are waived if you keep €3,000 in the account at all times.
What about the others?
Bank of Ireland, AIB and KBC all charge both account maintenance fees and transaction charges unless you leave a significant lump sum sitting in the account.
If you only have simple banking needs, eg, no overdraft, contactless card or chequebook requirement, EBS is your best bet as it's free.
Bank of Ireland charges €5 per quarter (unavoidable), and fees of 1c to 60c for all other transactions. AIB's standing charge is €4.50 per quarter and fees of 20c to 39c for transactions.
KBC charges €6 per quarter and 30c per ATM transaction or cheque lodgement.
Is there any free banking left?
If you're over 65/66 or under 23 you'll be fine since banks don't charge for student or 'golden years' accounts. That's the good news. For everyone else, you're subsidising it.
However, under a little-publicised EU rule all banks must offer a basic bank account that is either free or carries very low charges.
A 'basic payment account' must allow you to make deposits, withdraw cash, operate direct debits and give you an ATM card.
It probably won't have overdraft or credit options however and is best suited to those paid in a different jurisdiction from where they live.
In Ireland, EBS MoneyManager is free, but you can't use a chequebook or contactless payments; N26 has free banking if you make fewer than five withdrawals per month.
Most banks allow you to have free banking (for transactions anyway), if you keep thousands of Euro sitting in the account.
That's obviously not an option for many people who would be better off, in any event, investing that money and putting the interest earned toward the charges.
What about other options?
An Post's 'Smart account', costs €60 a year (less €30 after your first lodgement), with charges to make withdrawals at the atm (60c) and in-branch (50c), however it also offers rewards with partners like Lidl and SSE when you use your (contactless) debit card and you can pay most of your bills in post offices too, which many customers like. It also supports direct debits.
Some credit unions also offer current account style banking, even with ATM cards, but again, ask what charges apply.
You may be earning interest on your savings, which can mitigate against them.