Since 2010‚ the real cost of banking has come down for most consumers and particularly for those with mid-level accounts on a single fee for a bundle of transactions‚ the latest findings by the Solidarity Research Institute (SRI) show.

According to the SRI‚ which has been reporting on the cost of banking for the past eight years‚ the fees charged on mid-level bundle accounts have remained at about R100 a month for several years.

A bundle account is one that attracts a fixed monthly fee for a limited or unlimited number of transactions and typically includes a credit card. These accounts are popular and "marketed intensely to the middle-class"‚ the report notes.

Gerhard van Onselen‚ economics researcher at the SRI‚ said that while it was difficult to make exact comparisons of accounts, because of changes in their names and structures, "comparisons of inflation-adjusted costs of similar accounts over time suggest there have been large decreases in the real cost of transactional banking almost across the board".

The SRI’s report shows that clients who do only a few transactions (12 to 17 transactions) a month‚ bank more cheaply‚ in nominal terms‚ in 2017 than in 2010. But this is not the case for those who do more transactions a month (that is, between 25 and 30).

The SRI’s methodology is based on user profiles determined by the number of transactions by a customer in a month‚ rather than their income level. Broadly speaking, though‚ the higher the customer’s income‚ the higher their expenditure and number of transactions in a month.

This year’s report shows that for a customer who makes only 12 transactions a month‚ the Absa Transact is the cheapest account at R26.85 a month. A Capitec customer would pay bank charges of R34.10 a month‚ which is R2.25 less than the customer would have paid‚ in nominal terms‚ in 2010.

"Nominal comparisons only tell part of the story‚ however. The purchasing power of the rand has been eroded significantly through inflation from 2010 to 2017.

"To buy the same basket of goods one could buy with R100 in 2010‚ one would need more than R145 today. In other words‚ if a bank charged R100 a month for an account in 2010 and R100 for the same account in 2017‚ its fee in 2017 is actually 31% lower than in 2010 in real terms."

The report gives the example of Nedbank’s Savvy Electronic account and Nedbank’s Savvy Plus accounts‚ both of which came in as the cheapest accounts in 2010 and 2017 for customers who do 25 transactions a month. In 2010‚ these customers would have paid bank fees of R87.90 a month and in 2017‚ their bank fees would be R100 a month.

"In nominal terms‚ the cost increased by 13.9%‚ but in real terms the Nedbank Savvy Plus account is actually 21.8% cheaper than the Nedbank Savvy Electronic was in 2010."

Although competition in bank fees has been stiff since the SRI began reporting on fees eight years ago‚ Capitec remains the cheapest bank — with its Global One account — for anyone who keeps just a few thousand rand average balance in their account‚ the report states.

"Capitec’s no-frills approach and the fact that it pays significant interest on any positive balance allow the bank to remain the likely first choice for a large section of the population.

"That said‚ Absa’s Transaction account has become a very compelling proposition."

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