Service fees
‘Service fees’ are various charges that might be issued against your account to access various banking features. Some of these charges may include:
Deposits
Depending on your bank account, you may be charged different rates to deposit cash into your account to spend digitally. Typically, most banks will levy a charge based on the amount you wish to deposit.
Withdrawals – ATM, branches, or point-of-sale
When you withdraw cash from your online bank account, you are usually subject to a charge which will be automatically deducted from your account – this can vary depending on whether you are withdrawing cash through an ATM, a bank branch, or by a Point of Sale such as a till point in retail stores such as Checkers or Pick ‘n Pay.
Your bank may alternatively provide you with a number of free cash withdrawals, or offer different rates depending on where you choose to withdraw cash.
Payments
Payments into different bank accounts can also attract various charges. It’s worthwhile to note that your bank may charge different fees based on whether you intend to pay a beneficiary via Electronic Fund Transfer (EFT) or through another means, such as Instant Money, eWallet, or ATM withdrawal.
Many banks will offer free inter-account transfers (when you intend to transfer money between accounts you own) or alternatively offer free payments to beneficiaries that use the same bank you do.
Banks may also charge different rates if you choose to transfer funds to a beneficiary that is with another South African bank, or alternatively charge higher fees if you wish to pay a beneficiary from a foreign (overseas) bank.
Immediate payments
Immediate payments are an option offered by most banks where you can choose to instantly transfer funds to a beneficiary using another bank (as transfers between beneficiaries using the same bank usually are paid within one banking day).
This can be done by paying a charge that is usually dependent on the amount being paid – for example, should you wish to make an immediate payment, your bank may either charge you a flat fee or an amount based on the total amount you wish to transfer.
Proof of payment
Proof of payment services usually invite different fees – for example, your bank may choose to charge you differently if you decide to send a proof of payment through either SMS or email.
Balance enquiries
Though your bank account may offer you a number of free balance enquiries per year, some banks may choose to charge you a small fee if you request your balance via an ATM.
Internet/phone banking
Internet and app banking may also invite a fee that is levied onto your monthly bank account charge. If you choose to bank through USSD, you may also be charged by your network provider when accessing self-service tools.
Interest rates
What is the Repo Rate and Prime Rate?
To be able to operate, most banks borrow large sums of money from the South African Reserve Bank to offer loans to their own clients. This allows banks to lend out money that they don’t have, and earn interest (income) from loans that they offer to customers.
Banks essentially offer a loan ‘on top of’ a loan, so there needs to be a rule that determines the interest rate banks themselves can borrow from the Reserve Bank.
To read more about how the Repo Rate and Prime Lending Rate work, be sure to visit our helpful guide.
Foreign exchange conversion fees
What is foreign exchange?
Foreign exchange is the process where one currency is traded for a local currency – such as trading one US Dollar into South African Rands.
When making payments into foreign bank accounts, you may be charged foreign exchange (Forex) fees as your bank may be required to transfer your local currency (such as the Rand) into your beneficiary’s currency (such as the Dollar). These fees can vary depending on the size of the transaction and the bank your beneficiary uses.
Why do foreign exchange rates change all the time?
Foreign Exchange rates and fees can change frequently as currencies are traded during business hours – meaning that they can appreciate and gain value, or depreciate or lose value, over time. For these reasons, the charges you may expect on a foreign currency conversion can change frequently.
How do I get the lowest bank fees and rates?
As you progress through your financial journey, having a bank account that provides services you need but also charges you fees that you can afford is vital. Our in-depth guide can assist you in selecting an account that works for you!
