In this series of blog posts, we review the cheapest entry-level bank accounts from nine of South Africa’s biggest banks.
Today’s review includes offerings from Absa, African Bank and Bidvest Bank.
You may have already seen a few articles this year comparing the fees of South Africa’s main banks.
While it’s great to know when and how much your bank is charging you, there are other important factors you’ll want to consider when picking a bank account; ones that often get overlooked.
How much interest is your money earning? How easy is it to withdraw cash? Does your bank have a mobile app? How’s their customer service? For the most part, bank fees across the board are fairly similar – give or take a few rands – so it’s these other factors that should sway you. (Seriously, if you’re not all about that compound interest, you’re missing out.)
We take a closer look at some of these factors to give you a well-rounded review of South Africa’s entry-level bank accounts in 2019.
Absa: Transact Account
Absa’s Transact Account costs R5.30 per month. Point of sale cash withdrawals cost R1.60 while cash withdrawals at an Absa ATM cost R6.50. Debit orders to non-Absa accounts cost R3.80. There is no minimum income requirement to open the account, but there is a minimum balance of R20.
None. Zip. Most people who open an entry-level bank account aren’t too concerned with interest, but they should be.
Absa is the self-proclaimed leader in the banking industry when it comes to ATMs, so you’ll have no problem there. Absa’s mobile app boasts a 4.5 rating on Apple’s App Store and a rating of 3.2 on Google’s Play Store. Most branches close at 15:30, so minus a few points for that.
On HelloPeter – a website that allows customers to review companies (read: air their grievances) – Absa has an average rating of 1.57 out of 5, which puts them in the bottom half.
There aren’t too many extra perks with Absa’s entry-level offering, although Transact Account holders do qualify for Absa Rewards, which offer up to 30% off of flights.
Cash deposit fees are on the high side. To make an instant payment to another bank (in other words, for it to reflect immediately) costs R65.00!
African Bank: myWORLD
There is no monthly fee for African Bank’s myWORLD account. ATM withdrawals cost R6.00 per R1,000 at any ATM, while cash withdrawals at selected till points cost R2.00. Debit orders cost R4.00. The myWORLD account does not have a minimum account balance requirement.
myWORLD offers account holders 5.5% interest per year, an extremely impressive rate for a free, entry-level account. The interest rate more than makes up for some of the bank’s shortcomings.
African Bank’s mobile app has a 3.8 Play Store rating and a rather poor 2.9 on the App Store, so iPhone users may want to steer clear. African Bank has fewer branches than their bigger competitors, but they’re still prominent enough in big metros. Branches are open until 17:00 during the week.
African Bank’s average HelloPeter rating of 1.67 ranks them above the likes of Standard Bank and FNB.
Payments to beneficiaries are free, while instant payments only cost R10.00, much cheaper than most other banks.
Cash deposits are charged at 2% of the amount, which is quite pricey. African Bank’s website is not particularly impressive, and making sense of their myWORLD infographic is like deciphering the Rosetta Stone.
Bidvest Bank: Grow Account
Bidvest Bank’s Grow Account costs R6.00 per month. Cash withdrawals are R6.00 at a Bidvest ATM. There’s an additional charge of R1.40 per R100 at another bank’s ATM. (And you’ll probably end up paying this due to the Bidvest ATMs being few and far between.) Debit orders cost R5.00.
The Grow Account earns 2.25% interest per year, which might not seem like much, but it’s a lot better than zero. More importantly, if you transfer your money to the free savings account that comes with your Grow Account, your money will earn 5.75% per year – which beats inflation.
One almost requires a pilot’s licence to properly navigate Bidvest’s convoluted website. Most Bidvest branches are open until 16:30 or 17:00, with some even later than that. With ratings of 4.2 and 3.9 on the Play Store and App Store respectively, Bidvest’s mobile apps are up there with the best.
Bidvest has an average rating of 1.59 on HelloPeter, midtable stuff.
This is a big one. The Grow Account comes with a free savings account that earns additional interest. Also, you get a free EasyEquities account for those interested in trading shares.
EFTs cost R7.00 if you do them online but only R2.00 if you use the mobile app. Sneaky.
With bank fees all in the same ballpark, interest rates should be the deciding factor – assuming you don’t have an additional savings account.
Bidvest’s free savings account has a marginally better interest rate than the myWORLD account, but Bidvests fees are comparatively a lot higher.
African Bank’s myWORLD transaction account has the best interest rate of the three transactional accounts. However, Bidvest’s Grow Account comes with a free savings account, which attracts an interest rate of 5.75% per annum. With no monthly fee, the myWORLD offering looks particularly attractive.
Although the bulk of their transactional fees are very competitive, zero interest makes Absa’s Transact Account an unattractive option.
Check back tomorrow for Part 2 where we’ll be examining the entry-level bank accounts of Capitec, FNB and Nedbank.