One bank account that is growing in popularity and is aimed at low income earners is Standard Bank's E-Plan account.
While some banks are closing accounts for lower income earners, Standard Bank has opened 2,5 million E-Plan accounts over the past four years.
The target market for the account is people who earn less than R5 000 a month. But anybody can open one of these accounts, Tony Ketcher, Standard Bank's assistant general manager mass market, retail banking, says.
The account offers almost all the features offered by a current or savings account. As it is an electronic account you are issued with an Automatic Teller Machine (ATM) card which allows you to draw cash and make balance inquiries and other transactions such as inter-account transfers and account payments, once you have had the relevant accounts linked to your card.
You do not get a cheque book with an E-Plan account, but you can get a machine-issued cheque for an extra R5.
You should not go for an E-Plan account if you maintain a large balance in your account or if you have managed to save R2 000.
Then it is better to move your R2 000 to a Standard Bank PlusPlan savings account where you can earn a better rate of interest.
Also, if you are able to maintain a balance of R2 000 in your savings account, many transactions are free. You then have to weigh up the costs and interest paid on each account depending on the type and number of transactions that you do in a month.
COSTS
You pay a flat rate of R3 for every transaction and a monthly maintenance fee of R3 on the E-Plan account.
But you must try to use an ATM that is part of Standard Bank's network, otherwise you will pay R7 to make a cash withdrawal. This is because of the additional R4 Saswitch fee.
Also avoid drawing money over the counter inside Standard Bank, because there you will pay R12 for a cash withdrawal.
INTEREST
Interest on the E-Plan account is two percent on your daily balance and you get a bonus of three percent interest if you maintain a balance of R250 or more in your account for six months or longer. Interest is credited to your account at the end of every month and the bonus interest is paid at the end of every six months.
SAVING
The E-Plan account is designed so that you not only use your account for everyday transactions but also for saving.
For instance, you can tell the bank that you want to save R50 every month. This means that every month R50 of your money will go into the account's "savings purse" you will see how much you have in the savings purse, but you will not be able to draw the money from an ATM. To be able to draw the money, you have to speak to a consultant, but there is no extra charge for this, Ketcher says.
OTHER BENEFITS
* The account is easy to open. All you need is an opening deposit of R50 and a valid South African identity book.
* Stop Card: With your ATM card you are issued with a stop card, so for instance, if the ATM "swallows" your card, you insert your stop card, which will cancel your ATM card immediately and stop people from fraudulently drawing money from your account.
* Assistance: So far Standard Bank has 88 AutoBank E outlets around the country where uniformed staff can assist you when you use an ATM. They will also explain to you how to get the best out of your account.
* Death benefits: As an E-Plan account holder you automatically qualify for R1 000 worth of death cover provided you are under the age of 61.
You get an additional R1 500 worth of cover if you make three or more ATM cash withdrawals in a month or keep a regular minimum monthly balance of R250 or more in your account in one of the two calendar months prior to your death. If you are 61 years or older, you get a 20 percent discount on commonly used transactions instead of death cover.
* Prizes: You can also win cash prizes in the monthly savers' draw. To qualify you have to keep a balance of R250 or more or you must increase your lowest balance by R10 every month for six months in a row.
* Withdrawal limits: You can select your own daily and monthly ATM cash withdrawal limits. You should select a lower limit to protect yourself against overspending and theft. Select a higher limit if you regularly need to draw larger amounts.