A closer look at FNB's new pricing plan
FNB's new pricing schedule gives fee breaks to low-income customers but high income customers see a significant price increase.
FNB’s pricing schedule has focused on reduced increases, and no increases to customers earning under R100 000 a year. A major focus has been extending its EasyPlan offering, which is a direct competitor to Capitec.
EasyPlan, which is only available through FNB’s new low-cost branches, is now offering a cheaper banking solution to low-income customers than Capitec, with no fees for point-of-sale transactions.
Although FNB has stated that average increase for middle- and upper-income customers will be under 5%, Platinum cheque customers will see their monthly unlimited-banking fee increase by 11% from R99 a month to R110.
FNB has offset this price increase with increases in free data through FNB Connect and a tripling of eBucks rewards (from 0.8% to 2.5% of the transaction). But wouldn’t customers just prefer a lower monthly fee? This is hopefully not a sign of the price hikes to come. Is this one of those acquiring strategies where once they have attracted the client base the price hikes follow?
Investec Private Bank attracted customers with good value high-end banking, but have consistently hiked prices well over 10%, even as high as 20%. FNB Platinum clients will need to watch those price increases next year. That said, the FNB Platinum account is still good value for money, especially if you take advantage of the SLOW lounge offering when travelling.
Unlimited Gold cheque account holders will have a relatively low price increase from R90 to R92. However, Unlimited Smart cheque account holders will be affected with the rationalisation of the Smart cheque account with the Silver cheque account as the unlimited price option moves from R60 to R79. The Silver cheque account will fall away and the former Silver cheque account holders will see a decrease in fees if they migrate to the Smart Cheque option.
Non-FNB ATM fees
If you followed the 702 story on the staff member who paid R32 to withdraw R100 from an ATM, you may know that FNB charges its customers a whopping R32 if you don’t use one of its ATMs. FNB has reviewed this practice and now charges R12.50 but only for your first withdrawal in a calendar year—then it whacks you again with a R32 fee. FNB will argue that if there is no FNB nearby you can always use cash back at certain stores like Pick n Pay, Checkers and Shoprite—that is, if you have a debit card. As a cheque account holder with a cheque card, this option is not available to you so it remains a very punitive fee.
Petrol cards on the way out
Another interesting development is that FNB is introducing at R10 monthly fee for petrol cards linked to cheque accounts. This, combined with the FNB Fuel rewards programme that encourages the use of cheque or debit cards to pay for fuel, suggests that FNB would like to start phasing out petrol cards.
James Fowle, head of pricing at FNB, says this is very much the case. Now that most garages accept debit and cheque cards there is no point in carrying the cost of an additional card. According to FNB it has now paid out about R24-million in fuel rewards since the launch in November 2010.
If you tend to carry a high cash balance each month the FNB Fee Saver account is worth considering. If you maintain a balance of R9 000 a month, you receive 35 free transactions a month. This should be sufficient to cover most people’s banking needs. You forfeit interest but even at 6% per annum, that would work out at R45 a month, which would be the cheapest banking option for a full banking service at FNB
Multiple savings pockets
Like Capitec, FNB has now introduced multiple savings pockets. This can be a good way to target specific savings goals like next year’s school fees, holidays or a deposit on a car.
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