By Simon Moynihan of bonkers.ie
The launch of Permanent TSB’s new current account last month has brought some of much needed competition to the banking sector. The bank kicked off the summer with a new current account that makes it relatively easy for working people to avoid fees. With most banking customers now paying up to €100 per year in current account fees, the new account has been widely welcomed as it promises to save customers money on their day to day banking.
Permanent TSB reports that numbers opening new current accounts with the bank are up significantly and believes that customers are switching to save money on fees with other banks.
By contrast, Ulster Bank, the last truly free current account provider in Ireland, has announced that it will start charging customers €4 per month from July 1st unless they maintain a balance of at least €3,000 at all times, or lodge €3,000 to their account every month.
So can the new Permanent TSB current account really save you money? And how does it stack up against the other accounts available to banking customers?
Permanent TSB Current Account
Peramanent TSB’s new current account is simple to understand, and although it is not completely free, it has the easiest way to avoid fees. Customers must lodge at least €1,500 per month to the account to avoid day to day fees. If the €1,500 lodgement requirement is missed in any month, customers will pay €12 in fees for an entire quarter. No minimum balance is required.
Easy to avoid fees? Yes - The fee waiver should be within reach of most working people.
Likely cost if waiver is not met? Up to €48 per year
AIB Personal Account
To avoid current account fees with AIB, customers must maintain a balance of at least €2,500 at all times. If a customer’s balance falls below €2,500 at any time in a three month period, the customer is liable for all fees in that quarter.
AIB’s Personal Current Account has a complicated fee structure that could cost around €100 year for customers that cannot meet the waiver. AIB charges a quarterly account maintenance fee of €4.50, then €0.20 for all automated transactions like ATM withdrawals and direct debits, and then €0.30 for paper and cashier assisted transactions.
Easy to avoid fees? Not really – at €2,500, the fee waiver is quite high and may people simply can’t afford to leave €2,500 on deposit in a current account at all times.
Likely cost if waiver is not met? Around €100 per year
Bank of Ireland Personal Current Account
To avoid fees, customers must maintain a balance of at least €3,000 at all times, so free banking is expensive at Bank of Ireland. Having said that, if customers can’t meet the waivers with any bank, Bank of Ireland is the cheapest place to be if you have to pay fees. Bank of Ireland charges €11.40 per quarter for up to 90 transactions and then €0.28 per transaction after that. You can also opt to pay a flat €0.28 per transaction. It’s complicated and customers must decide which type of fee structure they want, but for customers performing a transaction a day or less it can be good value.
Easy to avoid fees? No – €3,000 is a lot of money to leave in a current account at all times.
Likely cost if waiver is not met? €45.60 per year
Ulster Bank Current Account
Ulster Bank will soon start charging customers €4 per month in current account fees from July 1st unless they maintain a balance of €3,000 or more at all times or lodge €3,000 per month. It’s a pity because Ulster Bank continued to offer completely free banking when all the other banks started charging fees.
For those that can’t meet the waiver, Ulster Bank’s €4 monthly fee will cover all day to day transactions. Unlike most other banks though, Ulster Bank will not charge fees for a full quarter if customers don’t meet the waiver. Instead, customers will be charged one month at a time. This monthly fee structure is fairer than the quarterly approach taken by other banks. However, the waiver is still very high and out of reach of most customers.
Easy to avoid fees? No. Lodging €3,000 per month would require a salary of around €50,000.
Likely cost if waiver is not met? €48 per year
Danske Bank 24/7 Current Account
Danske Bank customers cannot avoid fees. Danske’s 24/7 is their standard current account which charges customers a quarterly fee of €5, and then 25 cent for electronic transactions, 30 cent for paper transactions and 34 cent for cheques paid. For a transaction a day with this account, customers could expect to pay around €110, making it the most expensive current account on our list.
Danske does have other current accounts such as their Easy Plus and Prestige, but these accounts form packages that are linked to credit cards. The cost for these packages ranges from €75 to €125 per annum.
Easy to avoid fees? No – there is no way to avoid fees with Danske Bank
Likely cost if waiver is not met? There is no waiver. Customers can expect to pay €110 per year
Simon Moynihan is a co-founder of the price comparison and switching service bonkers.ie