Allied Irish Bank has joined Bank of Ireland by announcing that they will change the way they charge their current account customers from August.
Allied Irish Bank described these changes by saying they have “revised” their fees, and Bank of Ireland said that they are “replacing” theirs.
The fee announcements from the two pillar banks come at a time when Ulster Bank customers, who were the last to have fee-free banking, began paying current account fees of €4 per month from July 1st.
Bank of Ireland increases
Bank of Ireland’s fee changes will take effect from 19th August.
Bank of Ireland customers used to have a choice of two fee structures. They could pay €11.40 per quarter for 90 transactions (and then 28 cent for additional transactions), or they could pay a flat rate of 28 cent per transaction. For an average customer conducting a transaction per day, this meant fees of around €45.60 per year. It was one of the best current accounts available in the Irish Market.
Fees to double
Bank of Ireland is completely replacing their fee structure from August 19th when all customers will have to pay a €5 quarterly maintenance fee, and then pay 20 cent per automated transaction and 40 cent for paper and branch transactions.
For an average customer conducting a transaction per day, the new fee structure will mean annual fees of at least €92 - effectively doubling the cost of a Bank of Ireland current account.
In addition, it is no longer possible for customers to avoid fees altogether with Bank of Ireland. Previously, customers who maintained a balance of at least €3,000 at all times could avoid all fees and charges. Now those customers will have to pay the €5 quarterly maintenance fee, although they will not be charged for transactions.
Allied Irish Bank increases
Allied Irish Bank’s fee changes will take effect from 31st August 2013.
Allied Irish Bank customers currently pay a maintenance fee of €4.50 per quarter, and then pay 20 cent per automated transaction and 30 cent for paper and branch transactions. This fee structure, which has essentially been copied by Bank of Ireland, has made AIB the most expensive place for average customers to have a current account. For a transaction a day, it means €90 per year in fees at the very least.
Fees up by €20
From August 31st, AIB will increase ATM transactions fees from 20 cent to 35 cent and paper/staff transactions from 30 cent to 39 cent. The rest of their fees will remain unchanged.
These fee increases might not look like all that much, but we Irish folks still like writing cheques and popping into our local branches. In fact 19% of our transactions still involve paper or branch visits and 13% of our transactions are conducted through ATMs, so these fee hikes will actually add up.
An AIB customer conducting a transaction a day could expect to see fees go up to around €110 which is an increase of €20 per year and makes AIB easily the most expensive place to have a current account in Ireland.
Customers who maintain at least €2,500 in their current accounts at all times can still avoid fees with AIB.
Ulster Bank introduced fees on July 1st. Current account customers will now be charged €4 per month which amounts to €48 per year. Customers can avoid fees with Ulster Bank by keeping a balance of at least €3,000 or lodging €3,000 per month to their accounts.
Taking entirely the opposite approach, Permanent TSB launched a new version of their current account in April which makes it relatively easy to avoid fees. Customers can either lodge €1,500 per month to their current account, or maintain a balance of €1,500 to avoid fees. Customers that can’t meet the waiver will pay €12 per quarter or €48 per year.
The methodology that I have used to calculate annual fees in this piece is based on Bank of Ireland’s old fee structure whereby customers could pay €11.40 per quarter for 90 transactions. This equates to around one transaction per day. I reckon that’s a fair assessment of most people’s current account behaviour.
I have used the latest figures from the Irish Payment Services Organisation to calculate the percentage of paper, branch and ATM transactions. The IPSO figures represent all transactions including business, so consumer numbers may vary somewhat. I don’t have access to consumer figures, but if anyone wants to provide them to me, I’d be more than happy to recalculate!
Current accounts for students, graduates and the over 60s are still free with some banks.