Standard Bank 2017 fees dissected

Standard Bank, the country’s largest bank by number of customers, has increased the monthly fees of its two mid-market accounts. The pricing of ‘Elite Banking’ (comparable to other banks’ gold accounts) will increase by 5% to R100 from January, while ‘Prestige Banking’ (a ‘platinum’ account) will jump by 6% to R190. These increases are broadly in line with inflation.

While the minimum monthly service fee for those not on the bundled pricing options will remain flat (for both Elite and Prestige), 2017 will see the introduction of a monthly cheque card fee for both (R8.25 and R12.50, respectively). This means an effective increase of 15% for Elite accountholders and 13% for Prestige clients.

The methodology for calculating fees on cash withdrawals will change from a flat fee plus 1.2% of the value to an amount per R100 drawn. So, for withdrawals at ATMs, the fees will compare as follows:

With the new pricing methodology, you are more incentivised to draw as little cash as possible from ATMs. Anything over R1000 will cost significantly more in 2017 than it does this year. For example, a R2000 withdrawal at a Standard Bank ATM jumps from R28 to R36 – 29%! The cost of (securing and transporting) cash is only increasing.

Amazingly, Standard Bank customers on either the Elite or Prestige bundles still pay for debit orders (R4.50 for internal and R16 for external ones from next month (up 22%!)) and inter-account transfers to anything aside from a savings or investment account will cost R4 (from R3.90 currently). The fee for electronic account payments via internet/app/mobile banking – also excluded – reduces by 23% to R4 next year, the only notable reduction across its current account product set.

* The minimum account fee will be charged if your total fees on pay-as-you-transact does not exceed this amount. In other words, you will pay at least R63.25 for Elite Banking (R55 + R8.25) and R106.50 for Prestige Banking (R94 + R12.50).

In the case of Prestige Banking, the only time it makes sense to be on the pay-as-you-transact plan – if you require a credit card – is if you don’t withdraw or deposit cash often. Your base monthly fee will be R106.50 for the cheque account and R55 for the standalone credit card. This is cheaper than the R190 bundled fee, but not by much.

Like Nedbank, and rivals, the monthly credit card fees will – largely – increase substantially. It’s the ‘gold’ account segment that will be hardest hit, with the gold credit card fee increasing by 29% to R45 per month. Prestige Banking customers on the bundle pricing option will not be affected as their Titanium credit cards are included in the overall account service fee (the fee for a stand-alone Titanium card is up 31%).

* Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.

-Brought to you by Moneyweb