Not that long ago, the idea of paying current account fees seemed fairly ridiculous simply because nobody needed to pay current account fees. Just five short years ago fee-free banking was completely normal and banks were actually paying their customers to have current accounts with them. And they were paying very well too.
Like a lot of incredible things that seemed perfectly normal at the time, banking customers could actually get interest on their current account balances, and lots of it.* AIB and Permanent TSB were paying an eye-watering 11%, Bank of Ireland was paying 10.5% and even Halifax (remember them?) were paying 10%. Ulster Bank trumped them all though with a chunky up-front cash payout of €150 with no strings attached just for opening a current account. It was an amazing deal, and completely unimaginable today.
Of course, all of the exuberance, and freebies and high interest accounts are long gone. But fee-free banking survived for another few years until Bank of Ireland put an end to it in February 2011. And one by one the rest of the banks followed, except for one… Ulster Bank.
Which is why the news that the last truly free current account available in Ireland is to be cancelled is so disappointing. Ulster bank, the last free banking holdout, has begun notifying customers that they are going to start charging for current accounts from July 1st. Customers will pay €4 per month unless they lodge at least €3,000 a month to their account or maintain a balance of at least €3,000 at all times.
This sad milestone has prompted us to revisit our “best of banking” series and review the current accounts that are available to Irish customers right now. Even with every bank now charging fees on standard current accounts, there is still value out there, and it is still possible for many customers to avoid fees altogether. It’s also worth knowing that some banks charge a whole lot more than others, and some make it much harder to avoid fees. And some even pay a little interest.
Our criteria for consideration are pretty simple. The current accounts must be standard and generally available to most people. There must also be a way to avoid fees, no matter how difficult.** With that in mind, we have not included student accounts, membership accounts, or accounts for specific age groups, like the over 60s.
We thought a good place to start was with Ulster Bank since they inspired this review. And we’ll look at their new current account as the old free one expires on 1st July so anyone signing up now could start paying fees in two months time.
Ulster Bank Current Account
The not so good
Ulster Bank did keep their word. They said they wouldn’t charge fees until this Summer so their customers have enjoyed the longest run of fee-free banking, although the extra stretch is probably compensation of sorts for last year’s technical problems. It’s a pity they decided to introduce maintenance fees now, but if you’ve got to pay up, this account actually offers pretty good value. €4 per month is quite low and includes unlimited transactions so you’ll only pay for the usual stuff like bounced cheques and missed payments. Plus, Ulster Bank has decent online banking and smartphone apps. If you can’t make the waivers from any other bank, this is probably the best place to be if you have to pay fees.
AIB Personal Account
The not so good
If you can meet the minimum balance requirement to avoid fees, AIB is a fine place to bank. There are plenty of branches, good online access and popular smartphone apps. If you can’t meet the €2,500 minimum balance requirement, AIB can be very expensive and you’d probably be better off with another bank where fees are lower or you can avoid them altogether.
Bank of Ireland Personal Current Account
The not so good
For customers that do a transaction a day or less and pay the quarterly fee, this account is decent value. It’ll cost €45.60 per year which is the lowest charged by the banks reviewed here. Bank of Ireland also has Ireland’s largest branch network which is a major selling point, and their online and smartphone access is very well rated. On the other hand, the fee waiver is high and out of reach for many people.
Permanent TSB Current Account
The not so good
We say... Permanent TSB Current Account is Ireland's Best Current Account
The Permanent TSB Current Account deserves the bonkers.ie best current account in Ireland award because it makes fee-free banking widely available again. It’s not a completely fee-free current account, but the €1,500 lodgement requirement to waive fees is the most accessible of all the banks, and should be easy for most working people to meet. In addition, there is no minimum balance requirement and the account even pays a little interest.
Permanent TSB has said they are pleased with the response to this account since they launched it at the beginning of April. Irish people are notorious for staying with their current account provider for life regardless of fees though, so it will be very interesting to see whether Permanent TSB has been able to break that mind-set with this new account. Maybe they’ll let us know?
*There was a limit to the amount of interest paid. Generally, the banks paid interest on current account balances ranging from €1,500 to €2,500.
** Danske Bank did not make the list because they do not make it possible to avoid current account fees. They may prove better value for many customers however.
***We’ve taken a single person without kids or a mortgage here.
****KBC Smart Access Demand Account 2.6%, Permanent TSB Online Instant Access Account 2.5% and RaboDirect Demand Deposit Account 2.45%. AER on €3,000 from these accounts will yield more than €48 net… but sadly, not much more.
*****Although KBC announced last month that they were planning to launch a fee-free current account - there has been no further news. We'll keep watching though.
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