A colleague made the mistake – I jest – recently of examining the statement of fees his bank sends out quarterly and was somewhat alarmed.
“They were considerably higher than I expected,” he said. “The charges for chip-and-pin or other non-contactless card payments really add up.”
He, correctly I suggest, suspects that many people aren’t really aware how much they’re paying.
A generation of customers got used to the concept of fee free banking during the Celtic Tiger years but those days are long gone.
As far back as 2010, Bank of Ireland was limiting free banking only to those fortunate enough to be able to keep their current account balance over €3,000. AIB followed suit in 2012, albeit with a lower balance of €2,500 and PTSB raised their limit to that in 2019.
These days, even those wealthy customers will face fees on their personal current account, with PTSB the last to pull any fee-free offering for general bank customers last year.
Pensioners – or as the marketing-savvy Bank of Ireland would have you believe, Golden Years customers – and students can still generally access free banking at Ireland’s traditional banks but no one else.
And in the world of online banking and e-statements, it can be easy to lose track of charges and fees as they arise.
So what can you expect to pay in charges and is there any way of cutting those costs?
First up are the account maintenance fees. These are flat charges per month or per quarter (depending on the bank) which are charged regardless of how you use your account.
They vary from €4.50 per quarter at AIB to €6 a month (€18 per quarter) at Bank of Ireland and €8 a month (€24 a quarter) at PTSB.
On their own, that means you are paying €96 a year for the pleasure of banking with PTSB, €72 at Bank of Ireland and €18 at AIB.
However, the first two say these flat charges cover a multitude of per item charges that you might otherwise incur.
Bank of Ireland says its flat rate covers all euro-denominated debit card purchases (whether online, tap and go, or chip and Pin), cash withdrawals in euro from an ATM or over a bank counter, direct debits, standing orders, online or phone banking transactions or those conducted in branch (such as handling cheques, for instance).
The bank also says the charge covers various unauthorised transactions, such as standing orders, direct debits or cheques that are returned unpaid or any other payment that pushes your account into an unauthorised overdraft – though they will certainly charge for the overdraft itself.
And Bank of Ireland customers will also not be charged additionally for ordering a duplicate statement or interest certificate, seeking a domestic bank draft, card or PIN replacement or a request to put a stop to a payment among other things.
Over at PTSB, debit card purchases (online or otherwise) and ATM withdrawals are also free of charge over and above the monthly fee, as are the lodgement of cash or cheques, standing orders and direct debits although you will pay 50 cent per credit transfer elsewhere in the EU and to Sweden.
PTSB also promises to give you five cent back every time you pay in-store or online with your card or using Apple or Google Pay up to a maximum cashback sum of €5 a month. They also cashback of 5 per cent on your Sky bill or 2 per cent of SSE Airtricity bills if you use those services and pay by direct debit. In addition, PTSB says it will give back four cent a litre back on fuel bought at Circle K through its fuelcard, again paid by direct debit.
At AIB, while the headline maintenance fee might be low, you may find yourself paying more than in the other lenders, depending on how you bank.
AIB charges 20 cent per transaction on all debit card, contactless or online transactions and on each standing order or direct debit payment.
Withdrawing money at an ATM will cost you 35 cent each time, as will lodging either cash or cheques via ATM with that charge rising to 39 cent a piece if you do your lodgements or withdrawals at a bank or An Post counter. Other “staff assisted transactions” attract that same per item charge.
If you are a fan of tap and go every time you order a coffee or buy a paper, the charges could mount up quickly, as could ATM costs unless you are happy withdrawing reasonably substantial sums each time to cut down on the number of times you have to use the ATM.
Charges will also apply to a range of other common feature covered free elsewhere, such as duplicate statements (€3 per page), setting up a standing order (€4.50) or amending one (€2.50) and bank drafts (€3).
Having items returned unpaid to your account will be costly at AIB, with a €4.44 charge per cheque returned and €10 per items for direct debits, standing orders etc. And if you need to replace your card reader for online banking, it will cost you €5.50.
What does AIB’s account maintenance fee give you? Apparently, you will not be charged for stop payment requests, the issue or replacement of a debit card, duplicate interest certificates, standard Sepa payment by paper form through your branch and the costs incurred if you decide you want to switch your current account to a rival bank. So not a lot really – although the bank has waived charges on contactless transaction “until further notice”.
Overdrafts
Overdrafts are an expensive way of banking. You will generally pay a set up charge for the overdraft and then interest which is normally charged daily on any overdrawn balance.
At AIB, the set-up fee is €25.39. Over at Bank of Ireland it is €30 while PTSB charges €25.
If you have not agreed the overdraft in advance, additional charges will apply, all of which make it even more difficult to get your affairs back in order.
You will also pay charges when abroad even for items that might be free at home – including ATM withdrawals and using your debit card to buy things. Charges range from around 1.75 per cent to 2 per cent on card purchases and around 3.5 per cent on ATM withdrawals so it makes sense to manage these.
Options
While the traditional banks and their relative clunky online offerings are charging you for the service even as they make billions for themselves on your savings, a new generation of fintechs are widening their offerings in an effort to replace your bank as your main account holder.
These include Revolut, N26 and, shortly, Monzo.
Revolut offer a standard current account with limited fees although it could be more transparent on its website about what some of these are.
The biggest constraint is that you will pay for ATM withdrawals after you have taken €200 (or five withdrawals, whichever you hit first) each month. The charge is 2 per cent of the amount withdrawn subject to a minimum €1 fee.
The other well-publicised issue with Revolut is occasional frustration with communications especially when querying or challenging certain transactions.
N26 also offers a fee-free account though you will pay €10 if you want a physical debit card on their standard account and €2 per ATM withdrawal after the first three withdrawals in any month.
Of course, the fintechs do offer a range of other services, including easy cash transfers and foreign exchange that may make the offering more attractive. However, as of now, consumers might still prefer to use these accounts as an adjunct to their other banking services rather than going all in to use them as their primary current account.
In a more traditional vein, credit unions are also looking to expand their services with a current account offering. St Canice’s in Kilkenny is one of those offering the service and it charges a monthly account maintenance fee of €4 (€48 annually). That covers most services except ATM withdrawals where you will pay 50 cent per withdrawal after the first five withdrawals each month, which are free.
You will pay €10 for any item returned unpaid and €5 (up to €15 per day) for items that are referred back. Setting up an overdraft will cost €25 and you will pay €2.50 for each quarterly statement if you want a paper statement posted out to you.
Finally, unless you are one of those people who assiduously examines their online balances or estatements, it might be worth considering paying for the privilege of regular paper statements. It can be easier for many of us to keep track of things when we see it in black and white in front of us..
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
