Changes to current account fees - Midlands 103

Image audioImage Changes to current account fees - Midlands 103

Ireland's banking sector is undergoing a massive change, with many of the digital banks forcing traditional banks to alter and improve their product offerings in order to meet the needs of banking customers and remain competitive.

One such change has been the complete restructuring of Bank of Ireland's current account fees which will see it introduce a flat fee of €6 from now on.

CEO of bonkers.ie, David Kerr joined Will Faulkner on Midlands 103 to discuss the change to Bank of Ireland's fee structure and where consumers can get the best value when it comes to switching your current account.

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

Where do we find value if all banks are hiking their charges?

It’s bad news for a lot of current account holders, as Bank of Ireland (BOI) announced last week that it’s radically restructuring its current account fees. At present, the bank has over 1 million current account holders. 

However in reality, this could be a good thing for a lot of customers. It simplifies the fees they’ll be charged, as there were 26 different charges and fees for using your current account before. 

Now with the restructuring, BOI is bringing in a flat fee of €6 a month instead.

A lot of the banks had no fees at all on their current accounts not so long ago and then tried to keep current accounts fee-free by introducing ‘hurdles’. This meant you may have had to keep a minimum balance in your account every month or lodge a minimum amount every month to get free fees.

Bank of Ireland’s Golden Years account for those over 66 is staying as it is.

Digital banks

The pressure is now coming from digital banks. Revolut has now over 1 million customers in Ireland and N26 also has over 200,000 customers in Ireland.

The standard Revolut account is free, but you can pay a fee for its Premium and Metal accounts, which come with different additional services.

Despite the pressure from digital banks, traditional banks seem to be raising their charges. 

The Central Bank is reviewing 12 banking applications to raise charges at the moment. The banks have been heavily hit by Covid-19 and they feel they have to take steps to help recover from the losses. 

Switching current accounts

Current accounts have the lowest switching rate from any financial services product. It’s less than 1% per annum.

There is a current account switching code in place which makes the switching process more streamlined. 

However people at the moment tend to be opening a digital account with Revolut and are slowly migrating over the course of a number of months. They see this as a safer option so that they don’t miss any direct debits or mortgage payments.

Once someone has migrated over to a digital bank account, they can close their current account and then won’t be charged fees.

Credit Union and An Post

The Credit Union launched their current account offering earlier this year. It’s exactly like a regular current account and there’s an app. 

If you’re a Credit Union customer, you can open a current account and have all of your banking with the Credit Union.

An Post is similar. It’s currently pushing to offer more services to customers and is expanding its digital offering too. There are rumours that An Post may enter into the mortgage market as well. 

The most affordable traditional current account

The most affordable current account will depend on the person and how many transactions they do a month. 

Permanent TSB (PTSB) has a good offering. There is a maintenance fee of €6 per month, but the bank offers a range of services on its Explore Account. 

If you have your mortgage with PTSB as well, you get 2% cashback. You also get money back if you use your PTSB card to pay for transactions in-store and online. 

Compare banking options

Did you know that you can easily compare a range of banking products at bonkers.ie using our range of comparison tools?

If you’re looking to explore your current account options, our current account comparison service easily compares different current account features and charges from all of Ireland’s main banks. 

Before making the switch, take a look at the recent piece we wrote on who is offering the best value current accounts in 2021

You can learn more about how to switch current accounts with our helpful guide.

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