AIB to introduce new current account fees - Shannonside FM

Image audioImage AIB to introduce new current account fees - Shannonside FM

Ireland’s largest bank AIB has announced it will introduce maintenance and transaction fees for its current account customers, including removing its €2,500 waiver and charging for contactless card payments.

Our Head of Communications at bonkers.ie, Daragh Cassidy spoke to Shannonside FM's Mary Claire Grealy about AIB’s new charges and what it means for customers.

Here’s an outline of the main points discussed by Daragh in the interview.

How is AIB changing its current account fee structure?

AIB is going to start charging 1 cent for contactless transactions, which mightn’t seem like a huge amount but it had previously been free. AIB will be the third bank to charge for contactless transactions, after Bank of Ireland and Ulster Bank.

Previously if you kept €2,500 in your current account at all times, you could avoid all day to day fees, such as chip and pin fees, ATM withdrawal fees, standing order fees, etc. This waiver is now being removed which could hit a lot of people. 

Banking fees and charges are regulated by the Central Bank and it has approved the changes. 

How will these changes impact customers?

The fear is that when people get used to being charged 1 cent, it could become 2 cents and then suddenly it could be 5 cents. Chip and pin transactions are now 20 cents with AIB. 

There are lots of benefits to using cards over cash, but there’s a fear we will become hostage to these increased fees. It will begin to add up. 

For example, if you’re an average customer who makes five ATM withdrawals and five chip and pin transactions a month, one contactless payment a day and has about 10 direct debits on your account, you’d be charged about €7 a month going forward. This adds up to around €70-80 a year.

Is it likely other banks will follow suit?

It’s tough to know as other banks have different fee structures. KBC recently changed its fee structure so that all day to day banking is free if you lodge €2,000 a month into your account. It’s unlikely KBC will change its fee structure again any time soon.

Other providers likely won’t make changes any time soon either, such as the Credit Union or alternatives like Revolut and N26.

Would you be better off using cash?

There are ways you can reduce fees, like taking out more cash. If you’re in a shop and you’re carrying out a chip and pin transaction, you could ask for cash back so that you’re only charged once. 

However taking out lots of cash to avoid fees has a security risk too, since no one wants to be walking around with hundreds of euros on them.

You could also try to make sure you do contactless transactions instead of chip and pin. 

Take a look at this blog to learn more about how you can reduce your current account fees

Instead of changing your behaviour, you should look at switching current accounts. 

How will switching current accounts impact other banking products, like mortgages?

You don’t have to take out a mortgage with the bank you have your current account with. If you’re with AIB and want to switch your current account, you can still go back to AIB for a mortgage or a loan in the future.

Often for things like personal loans and credit cards, it can be easier to apply with your current bank. However, for loans, a lot of people go to the Credit Union now instead. 

What are the best current accounts?

The best current account for you depends on your own personal habits and circumstances. 

Permanent TSB has a current account called the Explore account. It has a €6 monthly fee but every time you pay for something in a store or online with your card, you actually get 10 cents back. You can earn up to €5 a month. This means the net cost for the account is only €1 a month. Outside of that, all of your day to day banking is free. 

The Credit Union also has a good current account which is €4 a month.

Switching current accounts

There are now 10 current account providers in Ireland, so there’s never been more choice. If you’re unhappy, then switch.

You can use our handy current account comparison tool to quickly compare different current account features and charges from all of Ireland’s main banks. 

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

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.

You can stay up to date on all the latest banking and personal finance news, and top saving tips with our blogs and guides.

Get in touch

Are you an AIB customer? What do you think of the new fee structure? Would you consider making the switch? We’d love to hear from you!

Feel free to get in touch with us on Facebook, Twitter or Instagram if you have any questions about what was discussed in today’s interview.