How to cut your bank charges

Banking fees can all stack up and you could be paying hundreds if not thousands for them each year. But there are a number of ways in which you can reduce costs, says Angelique Ruzicka.

A swipe here, a cash withdrawal there and a debit order here – banks can charge you for all of these of transactions. So when last have you checked whether your bank account is the right one for you and matches your spending habits? Depending on the type of account you have you could be paying a lot more in banking fees than what you need to.

Bank charges can set you back hundreds if not thousands of Rands every year. Follow these five simple steps to bring them right down:

1. Find out how much you are paying for bank charges:

It may sound tedious but the best way to find out how much you are paying in charges is to look at your bank statements over a certain period, say three months, and add them all up. If you find you are paying through the nose in fees then perhaps it’s time to look for another bank account. It’s important to look at all the different accounts and their charges, but for more on how to compare savings accounts check out our guide 5 steps to choosing the right savings account. You may find that by switching to another provider you could reduce your fees drastically. Alternatively, speak to your bank manager to find out what other products they can offer that would suit your banking habits. For example, if you don’t really transact a lot, then a simple pay-as-you transact account might be better for you. A number of banks offer these types of accounts including Nedbank and Standard Bank.

2. Swipe responsibly:

It depends on the type of account you have and who you bank with, but you could be charged every time you swipe your debit card at a retailer. If you swipe a lot, pre-load funds onto your credit card and use it to make your purchases as the costs are picked up by the merchant and the bank. But keep yourself out of the red; rather top up the card with your own money for transactions otherwise you will be charged interest. For tips on how to use your credit card wisely, click here.

3. Be smart with cash withdrawals:

Cash withdrawals cost even more than swipes and all the banks have different rates. Add up all the charges on your swipes and withdrawals. If they are very high find out if the bank has an option where you can pay a monthly fixed fee regardless of how many swipes or withdrawals you make. Some banks give you a certain number of withdrawals a month for free, but after that you get charged every time you take out cash from an ATM.

If you prefer to deal in cash, take out large amounts less often rather than making many smaller transactions as these can all add up. Only use your own bank’s ATMs. If you go to another ATM you will be charged a lot more than what your own bank charges. Depending on who you bank with it’s cheaper to make withdrawals from retail stores instead of ATMs. Capitec clients, for example, can get cash at Pick n Pay, Shoprite, Checkers, Pep and Boxer stores nationwide for only R1. “These are fixed fees irrespective of how much you withdraw,” said Charl Nel, head of strategic communications, marketing and corporate affairs at Capitec.

4. Conduct your own transactions:

It’s cheaper to bank online, transacting through your bank’s ATM or making use of mobile banking services than going into your branch. Electronic transactions are also cheaper than using cheques, so make use of this payment method wherever possible.

5. Manage your finances wisely to avoid incurring penalty fees:

Make sure your debit orders come off at the right time, i.e. when you have the funds in your account to support them. If you don’t have enough money in your account you could be charged penalty fees on dishonoured transactions. A dishonoured debit order can cost anything from R75 to R150, depending on who you bank with.

Keep up to date with the latest tips and deals by subscribing to our weekly newsletter here.