Three of South Africa’s leading banks – Absa, Nedbank and Standard Bank – have kept monthly account fees largely stable by 2022.
In fact, on the top 15 accounts offered at all three banks, monthly fees have only increased by five. Four of these, Standard Bank’s Prestige, Private Banking and Signature Banking, as well as Nedbank’s Private Wealth Bundle, target the higher income segment, and three are what would normally be considered ‘private banking’ products. However, the monthly fees for the five accounts have risen below inflation.
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It is somewhat remarkable that banks have kept prices largely stable, given that they effectively froze (most) of the price changes between 2019 and 2020 due to the Covid-19 pandemic. So this will be the second year in a row that most prices have not changed.
Newcomer Bank Zero has also kept its fees frozen since its launch, while TymeBank conducted some free transactions starting in January and increased the costs of cash transactions (deposits / withdrawals).
FNB’s price changes take effect on July 1, while Capitec Bank adjusts its rates in early March.
|Standard Bank – Monthly Account Fee||2021||2022|
|Absa – Monthly account fee||2021||2022|
|Gold Value Pack||R109||R109|
|Nedbank – Monthly Account Fee||2021||2022|
|Pay per use||R0||R0|
|Savvy Plus Gold||R115||R115|
|Savvy Platinum Package||R220||R220|
|Private wealth package||R452||R468|
In the most price-sensitive market segments (from ‘free’ or sub-R5 accounts to those that typically have accounts that cost a maximum of around R110 per month), fees have been largely frozen for more than two years.
Higher income customers have seen the most price movement.
There are two reasons for this: competition in the low- and middle-income markets is intense (and Capitec, due to its popularity, has effectively set the cap for a monthly account fee in R5), and the low-growth environment means that banks don’t really enjoy much pricing power.
These three banks that have frozen most fees for 2022 saw a decline in non-interest income (or transaction fee income) in 2020. Much of this was due to lower volumes of customer transactions due to the Covid-19 pandemic, and strict lockdown, but banks did not have a typical cushion of increasing monthly account fees.
Nedbank experienced a drop in non-financial income at its personal and commercial banking (PBB) unit by 11% in 2020. At Absa’s commercial and retail banking division in South Africa, non-financial income decreased by 8%, while that Standard Bank reported a 4% drop in non-financial income at its local PBB business.
One area where banks continue to raise prices is in cash withdrawals (and deposits).
Higher cash handling costs (in terms of security, transportation, etc.) need to be offset. While they have managed to divert large numbers of customers from cash, particularly in the higher income segments, mass market customers depend on cash.
All three banks will increase fees for withdrawing cash at their ATMs starting in January.
|Own ATM cash||2021||R500 withdrawal||2022||R500 withdrawal|
|MyMo by Standard Bank||R7.50 / R1 000||7.50 R||R8 / R1 000||R8|
|MyMo PLUS by Standard Bank||Release up to R5 000, then R7.50 / R1 000||Free / R7.50||Release up to R5 000, then R8 / R1 000||Free / R8|
|Absa Transact||R8 / R1 000||R8||R8 / R1 000||R8|
|Absa flexi||R2.20 / R100||R11||R2.30 / R100||R11.50|
|Absa Gold Value Package||Free up to R4 500, then R2.20 / R100||Free / R11||Free up to R4 500, then R2.30 / R100||Free / R11.50|
|Pay per use of Nedbank||R8 / R1 000||R8||R9 / R1 000||R9|
|Nedbank Savvy Plus Gold||Four free, then R2.20 / R100||Free / R11||Three free, then R2.30 / R100||Free / R11.50|
Accounts targeting higher income customers have been excluded from this comparison as they include “free” withdrawals each month.