AIB announces new fee structure - Newstalk
AIB announced it will be introducing maintenance and transaction fees for its current account customers amidst the outbreak of Covid-19 and the potential financial impact it is likely to have.
Daragh Cassidy, Head of Communications at bonkers.ie joined Pat Kenny to discuss the new charges, including its contactless card fee, and what it will cost customers going forward.
Here’s an outline of the main points discussed by Daragh in the interview.
AIB fee changes
AIB will be charging consumers 1 cent for a contactless transaction. While this might not seem like a huge amount, once people get used to being charged the fee may go up.
We’re being hit everywhere as banking customers. We have among the highest mortgage rates in the Eurozone, we have the lowest returns for savers and now increasingly we have some of the highest day-to-day banking fees.
How will this impact customers?
It really does depend on someone’s personal habits, but most people would use contactless anywhere from 1-3 times a day.
The Central Bank of Ireland has reported that contactless payments are becoming more and more popular and usage has shot up hugely over the past number of years.
It’s predicted that card payments will shortly overtake cash payments in Ireland.
Previously you could avoid a lot of AIB’s other, day-to-day charges by keeping €2,500 in your account at all times. However that’s now being removed, so now there’s no easy way for customers to avoid these fees.
When you add up all charges, now AIB customers could be looking at a banking charge of €100-150 per year.
Banks are now being charged to deposit money with the European Central Bank (ECB). Consumers leave money on deposit with banks and then the banks in turn leave some of that money on deposit with the ECB.
In theory, these negative interest rates are to encourage the banks to lend more and therefore stimulate growth. However, the flipside of this is that these negative rates are leading to weaker profitability for the banks, who are now trying to boost their profits by charging more fees elsewhere.
Compare current accounts
While it seems as though banking charges are constantly on the rise, there is value to be had if you shop around for a current account.
Two of the most popular digital banks are Revolut and N26. We carried out an in-depth, comprehensive comparison of N26 versus Revolut in this blog post.
We discussed a range of current account options, features and charges in a recent episode of our bonkers.ie podcast. Take a listen to discover all the options available to you.
Get in touch
What do you think of the changes to AIB’s fee structure? Are you an AIB customer who would consider switching bank accounts? Let us know!
If you have any questions on what was discussed in today’s interview, we’d be happy to help.