Nedcor clients are going to have to keep a far larger balance in their cheque account if they still want to qualify for free banking services.
From the beginning of this month, Nedcor raised the minimum balance on its N-5000 Investment Cheque account from R5 000 to R20 000.
You do not have to increase your balance to R20 000 and maintain it at that level, but if you don't, you will end up paying service fees every time you make withdrawals.
The service fee is R1,06 for the first R100; R1,06 for the next R100 or part thereof to a maximum of R18,55.
This means for a withdrawal of R250, you will pay R3,10. A withdrawal of R500 will cost R5,30 and a R1 000 withdrawal will cost R10,60.
Bob Wooddisse, executive general manager of retail banking at Nedcor, says N-5000 is an investment account accessible by cheque.
It was not intended to replace an ordinary cheque account for day-to-day transactions, but as a "specialised parking lot" account for substantial amounts of money.
"On the assumption that the product would see low transaction volumes and stable minimum balances we could confidently quote attractive interest rates and low transaction costs," he says.
This has not happened and steps had to be taken to keep as many of the product's attractive features as possible, but at the same time to address the costs of managing the administration of the account, Wooddisse says.
In fact, a significant number of N-5000 Investment clients already keep balances of over R20 000 and therefore relatively few will be affected, he says.
When viewed in isolation, the increase appears very steep.
But this limit has not changed since the launch of the product about 13 years ago, Wooddisse says.
Had the balance amount been increased in line with inflation over the period, the balance threshold would have been in the region of R30 000.
However, Nedcor decided to absorb some of the sacrifice itself and only adjust the limit to R20 000 from July 1, he says.
Currently the effective interest rate on credit balances is 12,13 percent.
The situation among other banks is:
* Absa does not offer a rebate option on its top cheque account products at present. The service fee that you pay is R1,43 for the first R100; R1,12 for the next R100 or part thereof up to a maximum fee of R14,75.
* At Standard Bank, you get a 100 percent rebate on service fees on the Prestige Plan cheque account package, if you maintain a minimum balance of R1 750 in your account.
If you don't, you are charged a transaction fee of R1,50 for the first R100 or part thereof; 80 cents for each additional R100 or part thereof to a maximum of R15.
* First National Bank's minimum balance required to qualify for free banking is R2 000. Otherwise you will be charged the normal service fee of 90 cents for the first R100; 90 cents for the next R100 up to a maximum of R15,30.
* With NBS's Market Trader account, you need a minimum of R10 000.
If your balance drops to between R2 000 and R10 000, you pay no service fees, but there is a charge of R1,82 for account payments and R2,83 for the paynet service.
Service fees kick in when you balance falls below R2 000. You will then pay R4,60 for a cash withdrawal and R1,82 for a direct debit.
A cheque withdrawal from a cheque issuing terminal will be R6,34 and from an NBS counter R8,46.