Cheapest banks in South Africa

The Solidarity Research Institute (SRI) has published its Bank Fees Report 2022, revealing that TymeBank is the cheapest bank in the country.

Solidarity economist Theuns du Buisson said the report reveals that digital banks TymeBank and Bank Zero offer the same services as traditional banks like Absa, Capitec, FNB, Nedbank and Standard Bank, at a fraction of the price.

“It will even be possible to do business with these banks completely free of charge if cash transactions and sending money to mobile numbers are avoided,” Du Buisson said.

According to the report, competition in the banking sector was increasing, with costs being a key factor for the newer entrants.

SRI has adjusted its methodology for this year’s report to keep pace with changes in consumer behavior.

“Following a survey, we also decided to adjust the list of transactions to include fewer cash transactions this year,” explained Du Buisson.

“These have been replaced by sending money to mobile numbers as well as internet transfers.”

“The latter is now free for all accounts apart from the very simple transaction accounts. Internet payments are also free of charge at the two online banks.”

The table below breaks down what types of transactions were included for each account category.

For its overall comparison, Solidarity calculated the basket price of 25 transactions.

It turned out that the total cost of these transactions would range from R99 to R143 at traditional banks, compared to R21.50 for TymeBank customers and R25 for Bank Zero customers.

“The new online banks that compete purely on cost are by far the overall winners when it comes to cost,” Du Buisson said.

“Even compared to the cheapest accounts held by traditional banks, those with branches, traditional banks lag far behind.”

“I wouldn’t be surprised if the new banks also become big banks within a few years,” Du Buisson added.

The chart below compares the total prices of 25 transactions on accounts at the three digitally-focused banks in South Africa.

For cheap accounts with conventional banks, Absa and Capitec were the cheapest.

Absa charged a total of R37.10 for a basket of 12 transactions in the analysis of this category. Capitec only charged 80 cents more for the same transactions.

Using a basket of 17 transactions, Capitec was the cheapest with a total of R42.90.

FNB’s Easy PAYU account ranked second using this methodology with a total cart cost of R54.45.

SRI noted that Capitec was the only one of the Big Five banks to offer interest on transaction accounts.

The chart below compares the prices of low-cost bank accounts with 12-transaction and 17-transaction baskets.

When it came to finding the cheapest account for the banking needs of medium-sized businesses among the classic banks, FNB emerged as the overall winner with its FNB Aspire current account.

“Like the other accounts in this category, this is a fixed-amount pooled account that includes a number of free transactions,” the SRI explained.

“FNB is by far the winner in this category because all transactions on our list are included in the fixed amount of R99.”

Standard Bank’s MYMO Plus account took second place at R129.40.

Below is a middle-class comparison of the cost of 25 transactions across the Big Five bank accounts.

The FNB also claimed top honors for accounts with “more sophisticated” banking requirements.

The FNB Fusion Premier account has incurred a total cost of R236 for a list of 30 transactions in this category.

This was followed by the Absa Premier Banking account totaling R242.50 for the same transactions.

“Both banks offer good value for money as the number of free transactions they offer is greater than that of Nedbank and Standard Bank,” SRI explained.

The chart below compares the costs of premium banking accounts using a basket of 30 transactions.

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