If you use your savings account for your monthly finances, you are operating from the wrong account and it is costing you more than it should.
A savings account is meant for savings, not transactions. The charges on these accounts at many of the banks are based on the balance you keep in your account.
For example, cash withdrawals from automatic teller machines (ATMs), at Absa, First National, Nedbank, Permanent Bank and NBS Bank are lower, or even free, if you maintain a certain balance. This varies between banks and ranges from R1 000 at First National to R5 000 at NBS Bank.
At Pick'n Pay Financial Services you get all your transactions free if your balance does not drop below R2 000. This is done to encourage you to keep money in your account and, ideally, to save a little more every month.
Interest on savings accounts
By maintaining a balance in your savings account, you will not only save on transaction costs, but will also earn interest on your money. Check what you can earn on your savings by looking at the comparative interest rate table on this page.
Remember that interest is calculated daily and credited to your account monthly. This means that your daily balance is important. Bear in mind that compared with other investment avenues, savings accounts pay relatively little interest.
Another advantage of a savings account is that your money is readily accessible. When a financial emergency arises, you can simply draw the money from an ATM.
Charges and interest rates covered in these tables are for card-based accounts. Banks usually offer lower interest rates on book-based accounts to encourage you to move to the electronic option.
Costs
Operating a savings account at Absa banks, Mercantile Bank and NBS Bank is now costing you more than it did six months ago.
Personal Finance last published its survey on savings account charges at the beginning of April. Since then these banks have upped their fees on certain transactions. Debit orders, stop orders and over-the-counter cash withdrawals have been targetted at Absa with increases of between nine and 67 percent.
At Mercantile Bank you now pay 20 percent less on every debit order that gets deducted off your account, but charges for over-the-counter cash withdrawals and deposits have been increased.
NBS customers now pay between seven and 35 percent on transactions from their savings accounts. The biggest increase, of 35 percent, was for cash withdrawals over the counter.