Transmission accounts have not escaped bank increases. Some transactions on your transmission account will now cost you 233 percent more. Personal Finance revealed last week how consumers have been hit by massive increases over the past six months in certain banking charges on cheque accounts. While generally fewer transactions saw increases in transmission charges, those that did were significant.
THE DIFFERENCES
Transmission accounts
A transmission account is the most basic type of bank account that you can get. The main difference between transmission and cheque accounts is that you usually do not get a cheque book with your transmission account and neither are you offered an overdraft facility.
Nick Cairns, the group communications head at Absa, says you can do anything you want with a transmission account, provided you do it with cash or via an automatic teller machine (ATM).
But some banks, such as First National Bank, will give you a cheque book on your transmission account, if you ask for one. At other banks you may be able to get a cheque issued on a withdrawal from an ATM.
Ann Bramhill, the manager: public relations, at First National Bank, says transmission accounts were created a few years ago to bridge the gap between savings accounts and cheque accounts. Savings accounts, she says, are characterised by many deposits and few withdrawals.
"About five years ago we found people were using their savings accounts to run their monthly budgets. They would put quite a large amount into the account and draw from it until nothing was left," Bramhill says. "They were not using their savings accounts for savings purposes. But on the other hand they did not need a cheque account with its comparatively higher charges."
Several banks offer transmission accounts and what you pay for transactions from these accounts varies from one bank to the another. Banks generally structure their fees either on a fixed rate for a particular transaction or on a formula, which then varies depending on the amount of money involved.
The large table gives you the actual charge structure for a particular transaction, the smaller table spells out the costs based on R250 for a quick comparison.
Cheque accounts
Also known as current accounts, cheque accounts are usually offered as packages which come with features such as automatic overdraft facilities and credit cards.
Cheque accounts are structured according to your income and that is why you have to meet certain qualifying criteria in order to get one.
At Absa you would need to earn a salary of about R3 000 and at Standard Bank, R2 000.
Banks will also run a check on your credit worthiness before allowing you to open a cheque account.
TIPS TO SAVE ON BANK CHARGES
* Opt for a transmission account.
Just because you qualify for a cheque account, does not mean that it is the best account for you.
Remember that with cheque account packages come "perks" such as overdraft facilities and cheque books but both carry a price tag.
Overdraft facilities encourage you to use money that you do not have and cheques are the more expensive way to pay.
* Go electronic.
Use an ATM to draw money; have insurance and other bills debited directly to your account; check on your balances, and; make transfers between accounts via the telephone.
* Avoid overthecounter transactions.
You can do all your banking without setting a foot inside your bank - its both cheaper and more convenient for you.