AIB to increase current account transaction fees - Northern Sound

Image audioImage AIB to increase current account transaction fees - Northern Sound

AIB will now charge its current account customers quarterly maintenance fees, including a number of new transaction fees which will see customers pay for contactless card payments.

Our Head of Communications at bonkers.ie, Daragh Cassidy joins Aaron McElroy on Northern Sound's The Wider View to discuss the current account transaction fees and the choice for consumers when it comes to switching current accounts.

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

What has been the reaction to the changes?

The reaction has been negative. AIB is now the third supplier to introduce a charge for contactless payments.

While the charge is only 1 cent per contactless transaction, this all adds up. The fear is that once we start paying the fee for contactless payments, the bank will increase it then to 2 cents and 5 cents. 

In ten years time, we could end up paying what we pay now for chip and pin transactions for contactless transactions.

It seems like the banks are coming for consumers in every way possible, whether it’s mortgage rates, the lack of interest we’re being charged on our savings and now increasingly current account fees are higher. 

There’s a lot of anger among consumers.

Will this hinder people’s confidence in banks?

The banks in Ireland probably have the worst reputation of all businesses at the moment and that’s understandable. 

However banks aren’t charities, they are there to make money.

People are wondering though whether fees are realistic and fair. Irish consumers know that fees are needed, such as monthly or quarterly charges, but now we seem to be having charges for everything. 

Banks are trying to push things towards a less cash-based society and while there are many benefits to this, they’re still charging us a lot if we’re not using cash.

Switching current accounts

It can be daunting to switch your bank account, but switching does save. Banks seldom reward loyalty here, yet consumers stay loyal to them.

You’re more likely to change your husband or wife in the course of your life than you are to change bank accounts. For many people, the bank we open an account with as a teenager is a bank we stay with for life.

There are now 10 current account providers in Ireland, between main banks, smaller banks and online-only options. There’s never been more choice. 

If people aren’t happy with what they’re paying, particularly with the three main banks, there’s good value to be had elsewhere. 

It’s not as difficult to switch bank accounts as people think. There is a code of conduct in place that the Central Bank introduced a few years ago to make the process easier. Depending on how you use your account, you could be looking to save maybe €100-150 a year in fees annually.

You can learn more about switching bank accounts in this guide.

What should consumers look for when switching banks?

It’s mainly the fees, but some banks would have far better mobile apps than others. There are three good options to consider.

1. KBC

KBC has a current account and if you lodge €2,000 every month, all of your day-to-day banking is free. KBC also has a good mobile app.

2. EBS

EBS has a very basic account. You can’t put an overdraft on this account, there’s no Google or Apple Pay and there’s no mobile app. There is online banking though. The account is completely free for all day-to-day banking. 

3. Permanent TSB

The Explore Account from PTSB will actually pay you 10 cents every time you make a card transaction. 

Consumers should also consider ‘digital only’ banks, such as N26 and Revolut. There are loads of features, great mobile apps and no foreign exchange fees when you go abroad.

Do any banks offer particularly good savings account rates?

Unfortunately not. It’s not an economy for savers at the moment sadly. Interest rates are at rock bottom levels. You would maybe get a maximum of 1-1.5% per year.

When you take into account Deposit Interest Retention Tax (DIRT) that you’ll be charged and inflation, your real return is going to be zero.

Due to Covid-19, it looks likely that the European Central Bank will decrease rates further into negative territory. Banks may end up even charging us for keeping money on deposit.

You can take a look at saving options here in this blog or have a listen to this episode of the bonkers.ie podcast to learn more about alternative savings options.

See how much you can save

What do you think of AIB’s new charges? Would you consider switching to save money? Let us know!

Comparing banking and personal finance products is easy on bonkers.ie. You can quickly compare a variety of banking products using our range of comparison tools.

If you’re looking for a new home for your money, our current account comparison service compares different current account features and charges from all of Ireland’s main banks.  

We recently wrote a helpful piece on which bank is offering the best value current accounts in 2021 which may guide you in your decision.

If you’re one of the many Irish consumers migrating to a ‘digital only’ account, make sure you check out our comprehensive comparison on N26 versus Revolut for a detailed review of both.

As always, we’d be happy to answer any questions you may have about current accounts, relevant charges or saving options.

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