From Saturday AIB will remove its €2,500 fee waiver, meaning some customers will start paying far more for using their current accounts.
Current account fees are probably the one thing people really hate paying for.
Even though banks provide a service, which they’re entitled to charge for, having to pay a bank for keeping your own money just feels wrong.
And in many EU countries, day-to-day banking charges are almost unheard of.
Not in Ireland, unfortunately, where most of the main current account providers charge some type of fees.
And for customers of AIB, those fees are going to get even higher from Saturday.
At the moment AIB customers get stung for a whole host of fees for using their current account, some of which you can see in the table below.
However, up until now, most of these fees such as ATM fees, Chip and Pin charges and direct debits fees could be avoided if account holders kept €2,500 in their account at all times.
From this Saturday 28th November this waiver is being removed meaning customers will be hit with fees almost every time they use their card.
ATM withdrawal fee
Chip and Pin
What’ll the impact be?
Someone who makes five ATM withdrawals, five chip and pin transactions, and has 15 standing orders, direct debits and/or wage lodgements presented onto their account each month will now pay almost €22 every three months in fees when you include the €4.50 quarterly fee.
And of course fees for things like non-euro debit card purchases, in-branch transactions, and bounced direct debits will still apply.
And customers who previously couldn’t avail of the €2,500 waiver will continue to pay this anyway.
Why is this happening?
Interest rates are currently at rock bottom and will probably be for years, meaning banks' lending margins are being squeezed. The Covid pandemic has exacerbated this problem.
Some banks, such as Ulster Bank, have even threatened to leave the Irish market as they can't make a profit.
The ECB is now also charging banks to keep money on deposit with it so the banks are now seeking ways to recoup some of those charges.
Banks have already slashed the rates they offer on savings products over the past few years. However they've held off explicitly charging personal customers for keeping money on deposit with them for now as they probably know how badly this would play out in public (although some banks have started charging business customers).
Charging customers money for managing their current accounts is a much easier 'sell'.
Is there any way of avoiding fees?
If you’re a student, graduate, or over the age of 66 you’ll still get all your day-to-day banking for free.
And customers who pay their AIB mortgage for their primary home from their AIB personal current account will also avoid fees.
Trying to use contactless payments instead of chip and pin, and trying to use the ATM machine as little cash as possible will also help you avoid fees.
Here’s a list of 9 simple ways to reduce current account fees.
However if you're an AIB customer who is unhappy with this news the best thing to do is look at switching providers…
Compare, switch and save today
There are now 10 current account providers in Ireland so there has never been more choice.
And depending on how you use your account, there may be far cheaper options available from the likes of KBC, Permanent TSB, N26 and Revolut. Even BOI, which recently replaced 26 different fees and charges with a flat €6 monthly fee could work out cheaper for some.
Perceptions about switching banks are largely negative with a lot of people worried that the process will be difficult, that they’ll lose direct debits, miss mortgage payments and will have to wait a long time to get new cards.
Despite what you might think, switching banks is actually a relatively easy process thanks to The Central Bank’s Switching Code, which ensures that switches have to be completed by the bank within a 10-day time frame; and this includes the transfer of all direct debits and standing orders.
If you're ready to switch you can easily compare current accounts across all the providers in Ireland on bonkers.ie right now.
Before making the switch, you might want to consult our guide on how to switch current accounts or take a look at the recent piece we wrote on who is offering the best value current accounts in 2021 to ensure that you’re making an informed decision.
If you’re considering signing up to a ‘digital only’ bank, take a look at our comparison on N26 versus Revolut for a comprehensive review of both, or listen to our recent podcast episode on N26 versus Revolut here.
What do you think?
Are you an AIB customer? What do you think about the new current account charges? We’d love to know your thoughts.