Saving on bank charges

26 July, 2006

The Ombudsman for Banking Services (OBS) today announced the creation of a web page on its website www.obssa.co.za that will direct bank customers to resources that will enable them to reduce their bank charges.

Bank charges have grown as an issue over the last few years and, judging from the information gained by the OBS through a competition that it is currently running, they are a concern to most people. When asked how their banks could improve, 7875 of the 15 525 entrants in the competition made mention of fees and charges.
The OBS has long been of the view that the best antidote to raising bank fees is public pressure. A strong consumer lobby in the USA succeeded in bringing about a reduction of fees or, in some cases, an abandonment of fees in respect of some types of banking accounts in that country.

There is no reason that similar results could not be achieved in South Africa. In fact, a recent media report linked the changing consumer landscape to reducing penalty fees, the introduction of bundled pricing options and more competitive pricing.

Individual bank customers can reduce their costs of banking by being selective in how they do their banking. Online banking is, for instance, a fraction of the cost of over-the-counter banking. Likewise, it is significantly cheaper (and generally safer) to draw money at your local supermarket than from an auto teller machine.

The OBS itself managed to reduce its bank charges by 13% in 2005, primarily through relying upon the electronic transfer of funds, instead of using cheques, for account payments. This saving was achieved in spite of a significant increase in the flow of funds through the OBS's account.

For tips and other reading on bank charges click here.