If you’re looking for a cheap bank account with no bells and whistles, Capitec is still offering the best value for money, mostly because it offers good interest on any funds in a transaction account, the 10th and latest “Solidarity Bank Charges Report” shows. 

Capitec comes out tops for low- and middle-income earners, but not for those at the high end of the middle-class and those looking for sophisticated banking needs, according to Solidarity’s report, which was released earlier this week.

Though Solidarity’s methodology is based on user profiles and not on income levels, the number of transactions made according to the user profiles correlates with income levels. 

The banks covered by the report in 2019 are Absa, Capitec, FNB, Nedbank and Standard Bank, and the accounts featured are transactional accounts only. Accounts aimed at young people, students, the elderly and private clients are excluded. 

In recent years, there has been stiff competition among the banks for the custom of consumers with a low income and basic banking needs. The report says the banks have reduced bank charges on almost all accounts aimed at this market. But Capitec has “succeeded in offering the biggest reduction in bank charges” in 2019, Solidarity says. The bank is the cheapest option for consumers who carry out 12 and 17 transactions a month, the report shows. 

What makes Capitec so competitive is that it is the only bank that offers good, positive interest on any funds held in the transaction account. “In the case of all the other banks, consumers have to specifically transfer funds to a savings account to benefit from it [positive interest].”

A further benefit of Capitec’s account in 2019 was the introduction of the “send cash” functionality on the bank’s app, which enables customers to send cash (up to R3,000 per transaction) to anyone with an SA-registered cellphone number. This is useful if you don’t have their banking details or they don’t have a bank account. Cash is redeemed at any Shoprite, Checkers or Usave store.

Capitec is also the clear winner in the category of accounts aimed at middle-income consumers. The banks market their flagship accounts to these customers, who make up their core customer base. “For consumers who do not desire to be part of a rewards programme, Capitec remains the cheapest bank,” Solidarity reports.

For consumers who want to belong to a rewards programme, FNB’s Gold Cheque account, which gives consumers access to FNB’s eBucks programme, offers “excellent value”.

The Solidarity report says this is the only account in its category, apart from Capitec’s Global One, that has reduced its charges since 2018. For this reason FNB’s Gold Cheque account beats Standard Bank’s Elite bundle, which in 2018 was the cheapest account with benefits.

For consumers at the top end of the middle-income bracket, the most competitive bank account is Standard Bank’s Prestige Rebate account, followed by Absa’s Premium account in second place, and Nedbank’s Savvy bundle in third place. Standard Bank’s Prestige bundle would be the most costly option. 

Solidarity notes that in this category, your choice of bank would rather be about benefits offered than the cost of a transaction account, and rewards programmes are likely to be a big consideration.

Rewards programmes

Rewards programmes offered by the banks allow them to distinguish themselves and compete in areas other than bank charges. The qualification criteria, rewards and cost of membership differ from bank to bank. While FNB doesn’t charge customers a fee to belong to the eBucks programme, eligibility to belong depends on the type of account you have. 

With eBucks, you earn points, get discounts and can pay with eBucks at participating stores and partners. 

Nedbank’s rewards programme is called Greenbacks and qualifying accounts are not automatically linked to the programme — and nor are they necessarily free. Depending on the account you hold, it is free or costs R22 a month to belong to the programme. 

Standard Bank’s rewards programme is called UCount and membership costs R24 a month irrespective of the account you have. 

Absa has Absa Rewards, and Solidarity says the main difference between that bank’s rewards programme and that of other banks is that customers can convert their rewards into rands and are not limited to spending their points at participating stores.

Capitec now offers a programme called Live Better Rewards, but Global One customers aren’t required to earn points, they merely qualify for discounts on certain products and services from participating dealers and stores.