/ 11 May 2010

FNB first of the big four banks to challenge Capitec

Capitec is gaining a great deal of interest for its no-fuss, simple and inexpensive approach to banking, and it would seem the bank is ruffling enough feathers for FNB to respond with its version of a no-nonsense bank account, along with its own dedicated branch.

FNB has rolled out eight EasyPlan branches where customers can open an EasyPlan account, take out personal loans, and sign up for a funeral policy. These branches have been opened at busy nodes like Ghandi Square in the Johannesburg CBD, where there is a heavy traffic flow of lower-income customers.

Like Capitec branches, transactions are all done online, allowing for a paperless, low-cost environment and the pricing is competitive and simple to understand.

There is a monthly fee of R3,95 and most transactions carried out either at an FNB ATM or an EasyPlan branch cost only R2,95, which includes cash withdrawals, account payments, statements, cash deposits, and pre-paid purchase of airtime or electricity. Debit orders are also charged at R2,95 and transfers done by cellphone or internet are free. All of these fees are more competitive than Capitec.

Customers can make debit card purchases or cash withdrawals at retail stores for only R1. Customers can sign up for cellphone banking, internet and inContact for R8,50 per month.

Like Capitec’s offering, EasyPlan also offers a savings pocket where customers can save separately to their main bank account at competitive interest rates, currently 6,5%.

The funeral cover is well priced, for example, R50 would buy R30 000-worth of funeral cover for the account holder, spouse and up to five children.

Comment
Although targeting a lower-income customer, anyone can open an EasyPlan account at any FNB branch. While typically a lower-income earner tends to transact less, resulting in monthly fees of about R30, calculating fees based on my own banking behaviour, I would pay around R58 a month in bank fees (and I would be charged R5 for a unpaid debit order rather than the R105 for a conventional FNB account). However, the FNB Smart Transmission account would be a better option for me as it has a monthly fee of R59 for unlimited electronic transactions and FNB ATM withdrawals.

Visit Smart Money for more news, blogs, tips and Q&As. Post questions on the site for independent and researched information.