The affordability of banking is an obvious point to consider, yet it is often overlooked when choosing a bank account.
Too many people are still not adequately informed about financial products and services, the most important of which is a transaction account for day-to-day banking.
They seem neither to know nor to care what their banks are charging them in fees alone for core services. If they could see just how much they were paying – which often runs into several hundred rands a year – they would be shocked, particularly as there are more affordable accounts on the market because traditional banks compete with one another and with newer, more innovative banks.
Consumers have freedom of choice. Unfortunately, most still do not view banking decisions as they would grocery shopping or even a motor vehicle purchase. Most of us do some comparative shopping to get the best deal, because who doesn’t want to pay less if they can?
It’s puzzling then, given the exorbitant banking costs, why consumers don’t shop around before committing to an account.
Freedom to choose
Did you know, for example, that you can bank at one financial institution, obtain a credit card from another and apply for a home loan through yet another? Believe it. When you open a bank account you are under no obligation to make use of all the products or services offered to you. This is great news because it means that you are empowered, as a client, to make your own decisions and to pick and choose the products that suit you best.
Shop around
Core banking is a basic right, not a privilege or a luxury, and everyone should be able to transact or save in the most affordable and simplest way possible. Fortunately, affordable, accessible and simplified banking does exist, so when choosing a bank account you need to know what your options are. Read the newspapers, watch television, visit all the banks and stay informed.
You can also speak to a branch consultant, visit the bank’s website or even contact the client-care centre for more information. If you prefer to take more time to think about your decision simply ask for a product brochure that summarises the account, all its benefits and the fees charged. You will be surprised to see just how much typical banking costs can vary.
Pay attention to the monthly administration fees, debit card purchases, cash withdrawals, stop orders and debit orders, to name a few. After all, there’s no sense in wasting money and paying excessive charges when there’s a more affordable option available. Calculate what a typical number of transactions would cost you at each of the banks and remember to ask lots of questions and get as much information as you can – what are the branch hours, how accessible is your money and are there unique benefits?
Opening an account
Once you have researched all the available options it is simple to switch banks or open another account at a different bank. The typical documents required are your South African identity book, proof of residence stating your full name and physical address and a deposit to activate the account. This deposit, which is usually the account’s minimum balance, may be as little as R10, depending on the bank.
Lesson for learners
October is dedicated to teachers as we celebrate World Teachers’ Day. I have the following challenge: give your class a short lesson in the value of making careful and considered choices, as discussed in this month’s column.
You have the power to influence future generations, so show them how easy it is to take that first step towards financial freedom by shopping around before making important banking decisions. The partnership with a bank is about the relationship, the products, the service support and the costs.
Yolandé van Rensburg is head of corporate communication at Capitec Bank