The impact of banks' charges on their poorest customers was painfully illustrated by a recent reader's letter received from an area called Mkhuhlu, in Mpumalanga.
The reader, Mr Ngomane, said his cousin, a pensioner, left First National Bank in tears last year when she withdrew R70 over the counter from her savings account and was charged R6,50. This amount was not reflected in her bank book.
The tellers refused to give Mr Ngomane a receipt to show that this amount had been taken, but they gave him First National Bank's latest sheet of savings account charges. These showed that if a withdrawal from a Super Save, or People's Benefit Savings Account, resulted in the balance falling below R500, the withdrawal charge was R6,50.
Mr Ngomane said it appeared as if only black pensioners were being targeted with these charges, and pointed out that few black pensioners would be able to save R500 a month when they only received a monthly state pension of R400.
Mr Ngomane is incorrect in thinking that only black pensioners are being targeted in this way. Pensioners of any colour are in a particular bind if they are putting a monthly pension of R400 into a savings account, and are making about six withdrawals a month of R70 a time. At R6,50 a draw this means about 10 percent of their income is going towards bank charges.
One answer is to have a different type of account, since First National Bank points out that if you make more than two withdrawals from a savings account a month, you are obviously in the wrong product. Another option would be to change to a transmission account and use an ATM card. Withdrawal charges on a transmission account are much lower and the interest earned on credit balances is comparable to a savings account.
But using an ATM card may not be easy for an old lady who has never touched a computer before.
Since banks, with their heavy costs of staffing and providing security to far-flung branches, cannot or will not lower their charges for special cases, what are the alternatives for those with an income of less than R500 a month?
Billy Tlhabanelo, general manager of PostBank, a division of the Post Office, says PostBank now has a savings account on which there is a flat charge of 60c per month, no matter how many deposits or withdrawals are made. The interest paid is on a sliding scale, currently from 1 percent per year on the smallest amounts, to about 9 percent a year on the largest sums.
However, the minimum balance on this account has just been raised to R50 from R10. If your balance falls below R50, Tlhabanelo says, you are considered to be closing the account.
PostBank is looking at providing other types of products suitable for people in rural areas or those in the lower- to middle-income brackets.
For those to whom even R50 is too much to save, informal savings schemes would be the next alternative. People might pool their money in a stokvel, which in turn would keep the money in the bank, and bank charges would be shared among the members of the stokvel. If you wanted to make a withdrawal, you would have to agree to do so with the other members.
Unfortunately, when it comes to finding a place to keep your money, you cannot expect to get security and convenience for nothing. But I don't believe banks are selling themselves to their future customers by being so rigid about their charges.