Bank customers are paying significantly more than they need to for their current accounts, a survey by the financial services regulator shows. Dominic Coyle reports.
The Personal Current Account Cost Survey published by the Irish Financial Services Regulatory Authority (IFSRA) yesterday illustrates that customers can save more than €100 a year in fees and charges on their current accounts.
AIB and Bank of Ireland are the dominant players in the Irish retail banking sector, accounting for roughly 75 per cent of all current accounts between them. However, their customers are paying between 20 and 30 cents for every transaction, such as writing a cheque, withdrawing money from an ATM or lodging money at a branch.
Permanent TSB does not charge for any of these services and NIB offers a free option to customer not requiring an overdraft.
Ulster Bank and Bank of Ireland do offer accounts free of transaction charges but levy account maintenance fees.
Ulster Bank's U First Account was ranked as the most expensive in the comparative study carried out by the regulator. The account carries a maintenance fee of €9 a month or €27 a quarter, compared to quarterly fees ranging from zero to €11.40 among its rivals. A statement from Ulster Bank said the account was a "packaged, benefit-rich" product and it was unfair to compare it with standard current accounts on price alone.
Permanent TSB welcomed the survey and said it demonstrated that it was in people's interest to shop around. Permanent TSB expects to open 60,000 new accounts this year on the back of a new industry code facilitating customers who want to switch from one bank to another.
The survey was published just weeks after the introduction of the code. IFSRA's director of consumer affairs, Ms Mary O'Dea, last night said the regulator would consider making the code mandatory.
The survey also highlights significant differences in the costs of overdrafts. Arranging an overdraft costs from €20 at Permanent TSB to €35 at NIB, although NIB reduces the charge for renewing the annual facility to €20 while most other institutions don't. NIB does have the lowest overdraft interest rate - at 10.8 per cent - compared to 14.4 per cent at Bank of Ireland.
Ordering a duplicate statement is an expensive exercise wherever you bank - costing from €2.50 a page at Permanent TSB to €3.80 at NIB.
While drawing attention to the wide difference in cost, IFSRA warns that people should consider other factors when choosing a bank.
"When shopping around, consider a range of factors and not just fees and charges," it advised. "For example, what level of service is provided, can you bank online or by telephone, what about branch location, etc."