It's your money: Danske and ACC exit means bank customers must switch
THE decision by Danske Bank and ACC Bank to effectively shut up shop in Ireland means that tens of thousands of people will have to find a new bank over the next few months.
Many Ulster Bank customers, who are anxious about the future of the bank, could also be considering jumping ship.
Earlier this month, Ulster Bank, which is owned by Britain's Royal Bank of Scotland (RBS), was described as "an important business for the whole island of Ireland" by Ross Ewan, the RBS boss. However, as Ulster Bank will be part of a group-wide review of RBS, questions surround its future.
So if you have to find a new bank, or are an Ulster Bank customer with itchy feet, what are the best current accounts out there? And how do you go about jumping ship?
When you strip out Danske Bank, ACC Bank and Ulster Bank, there are only five banks offering current accounts here – AIB, Bank of Ireland, EBS Building Society, KBC Bank and Permanent TSB.
The best place to head if you're switching current account is either Permanent TSB or EBS, according to Simon Moynihan, director of communications with the personal finance website, bonkers.ie.
"If you have a job and are able to put €1,500 a month into a current account, Permanent TSB's current account is free," says Moynihan. "If you don't bank much, and can keep at least €500 in your account each month, EBS's current account is good – particularly if you're on a pension or low income."
EBS's Money Manager account is the only current account which does not charge a quarterly fee. If you keep a minimum of €500 in your account or lodge at least €1,500 into it every month, you won't be charged transaction fees on the first five withdrawals you make from your account each month.
So if you make less than five withdrawals a month, this account could be the best one for you. EBS's current account is one of the few current accounts which pays interest on the money in your account – although at 0.03 per cent, it's a tiny amount.
If however you make a lot of withdrawals from your bank account every month, EBS's current account won't suit you because transaction fees add up over time. For example, if you withdraw money from an ATM every second day or you regularly use your debit card when shopping, you could pay more than €4 in transaction fees a month – or at least €48 over a year. Furthermore, as EBS's Money Manager doesn't allow you to set up overdrafts, the account won't work for you if you go into the red regularly.
Permanent TSB charges an account maintenance fee of €48 a year on its current account. Although this is higher than the maintenance fees charged by most other banks, it – along with transaction fees, can be avoided if you lodge €1,500 into your account each month.
Another good thing about Permanent TSB's current account is that it pays 1 per cent interest on credit balances up to €1,500. This is the highest credit interest paid on any of the current accounts available in Ireland. Permo also has the lowest charges for setting up and renewing overdrafts on your account. At €20, its charge to set up or renew an overdraft is still hefty – however, the fee is as much as 50 per cent cheaper than what other banks charge.
The amount of money you must either lodge or keep in your account each month to avoid fees is a lot higher with the other banks than it is with Permanent TSB or EBS. With some banks, you can't escape fees at all.
If you open a current account with Bank of Ireland for example, you can't avoid its account maintenance fees of €20 a year – no matter how much money you have in your account. Furthermore, you can only avoid Bank of
Bank of Ireland is the priciest bank to set up or renew an overdraft, charging €30 for overdraft set-ups
Ireland transaction fees if you can keep at least €3,000 in your account each month – a condition which many people could struggle to meet. And B of I is also the most expensive bank to set up or renew an overdraft with, charging €30 for overdraft set-ups or renewals.
KBC Bank is another bank where you can't avoid account maintenance fees. Its maintenance fees come to €24 a year, regardless of the amount of money in your account. You can dodge ATM and cheque processing fees with KBC – but only if you keep at least €2,000 in your account over a three-month period. At €25, its fees for setting up or renewing an overdraft are 25 per cent more expensive than PTSB's.
AIB charges account maintenance fees of €18 a year. You can avoid these fees – as well as transaction charges – but only if you keep at least €2,500 in your account every three months. At €25.39, AIB has the second most expensive overdraft renewal or set-up fees.
MAKING THE SWITCH
Seven out of 10 adults who opened their first bank account with their First Holy Communion money are still with the same bank, according to research by Amarach, which was published by Permanent TSB last week.
The exodus of most of the foreign-owned banks from the Irish market is bound to change this however.
If you're one of those who wishes to switch current account, you must first contact the bank or building society you wish to move to.
If you have an overdraft with the bank you plan to leave, you will need to talk to your new bank to see if you can transfer this overdraft over. If your new bank won't allow you to do so, you will need to clear your overdraft before you switch account.
You then need to agree a switching date with your bank – that is, the date when your account starts to be moved from your old bank. Choose a date when there are not that much transactions going in or out of your account. Avoid a date which overlaps with the time your mortgage repayment or rent is paid. "Ask your bank what the best time of the month is to switch," says Moynihan. "Usually there's a quiet time. For example, if you get paid at the end of the month, it might be a good idea to move mid-month. If you pay your utility bills every second month, choose the month that those bills are not paid."
You then need to com-plete an account transfer form for your new bank. This form will be sent to your old bank which then supplies details of your direct debits and standing orders.
Once this form is completed, it is worthwhile getting a copy of it so you can check that all of your direct debits and standing orders are transferred over. Otherwise, if some of your direct debits or standing orders are not transferred over, you could end up missing bills or falling behind on a mortgage repayment. "The ultimate responsibility for making sure the switch goes through is yours," said Moynihan.
It shouldn't take any longer than 10 working days to switch accounts and as long as you move to the right bank, you should save a few bob when doing so.