Capitec is both the least expensive bank and the bank with the simplest product offering of all the banks considered in the Solidarity Research Institute’s latest survey on bank charges, which was released late last month.
The survey – entitled “A comparative analysis of the cost of personal transaction accounts at five South African banks” – compared the charges levied by the “big four” retail banks – Absa, First National Bank (FNB), Nedbank and Standard Bank – and Capitec.
According to the survey, “on an overall sliding scale, Capitec’s transmission account is the cheapest, followed by FNB, Nedbank, Standard Bank and Absa.
“There is, in general, very little difference between Standard Bank and Absa’s transmission accounts – the charges of both are high,” according to the survey.
Capitec does not segment clients according to their income level. The bank offers just one transaction account – the Global One account.
The survey quotes Riaan Stassen, the chief executive of Capitec, as saying he has yet to understand why a high net worth client and a blue-collar client should pay different charges for using the same banking facilities.
Capitec’s fees have remained unchanged since last year, whereas all the “big four” banks increased their fees this year.
The limitations of the Global One account are that it does not offer a credit card, an overdraft facility, a cheque book or cellphone banking. However, Capitec does offer internet banking, which is free.
Capitec plans to launch a credit card in the new year. In the meantime, you can link your Capitec account to a credit card from another financial services provider. You could pay the amount owing via internet banking – by making your credit card a beneficiary. Paying a beneficiary costs R2.75, irrespective of the value of the transaction.
At Capitec, debit card transactions are free and cash withdrawal fees are lower than those charged by the other banks.
The Solidarity survey also notes that it is “relatively cheap” for Capitec clients to draw money at the ATMs of other banks.
“Capitec charges a fixed fee of R3.75 per withdrawal at a Capitec ATM and a fixed fee of R7 per withdrawal at the ATM of another bank.
“To put it into perspective, an Absa client with the standard current account pays R9 to draw R500 at an Absa ATM, whereas a Capitec client pays only R7 to withdraw R500 at the same ATM. It therefore costs the Capitec client less to use the Absa ATM than it costs Absa’s own client,” the survey says.
Capitec’s penalty fees (such as the fee for a debit order that is dishonoured because of insufficient funds in your account) are only R3.75 – the lowest of all the penalty fees of the banks in the survey.
Another attractive feature of Capitec’s transaction account is that the bank currently pays interest of six percent on balances below R10 000 and interest of 4.75 percent on balances exceeding R10 000.
The interest is calculated daily and capitalised monthly. These rates are higher than those of the other banks’ savings accounts and this means that any cash left in the transaction account earns interest.
“Capitec is therefore suitable for people who do not need a cheque book or overdraft facility and who do not mind using an external ser-vice provider’s credit card.
“People who are able to maintain positive balances on their cards are rewarded with interest, which has the potential to cover all bank fees on the account,” the survey says.
South Africa’s youngest retail bank, Capitec was founded in 2001. It has 3.2 million clients and attracts on average 90 000 new clients a month, according to the company’s interim results, which were released in September.
The bank was recently named the overall winner at the annual Ask Africa Orange Index Awards. Surveying close to 100 brands across 18 industries, the award is based on the opinions of 10 000 consumers surveyed nationally over six months.
Capitec won on the strength of its transparent benefits and services that put the customer first, Sarina de Beer, the managing director of Ask Africa, says.