The one financial product everyone needs is a current account, writes Grainne McGuinness.
Even if a person has a blissfully debt-free life, there are regular bills, and, for most of us, an account into which wages are paid. But current accounts are not created equally.
There are differences between what institutions in Ireland charge. Banks rely on inertia to keep customers, despite the irritation of quarterly fees.
But the Central Bank has a statutory code on the switching of current accounts, with which all banks and building societies in Ireland must comply. So given that even a personal account can accumulate €100 in charges per year, it’s worth checking to see if your current provider is offering you value.
The ideal is no charges and many Irish providers have a fee-free current account. This is based on a minimum amount either being paid-in monthly or maintained in the account at all times.
The most attractive is from Permanent TSB. They will give you fee-free banking if you lodge €1,500 every month, which is close to the net minimum wage.
Next best is KBC, who will waive the fees on their Current Account Extra, once you lodge €2,500 every month.
AIB and Ulster Bank both offer free fees, if you keep a minimum balance in the account at all times.
This is a much more demanding condition than the monthly lodgement. AIB require that you keep a €2,500 credit balance, and if you fall below that your account will be charged maintenance and transaction fees for the entire fee quarter. Ulster Bank offer fee-free banking if you maintain €3,000 in the account at all times, and charge you for the month if your balance falls below that limit at any point.
AIB offer to waive current-account fees as a bonus to their mortgage customers. If you have an AIB home mortgage, they will waive the maintenance and transaction fees on the current account you use to pay that mortgage.
Bank of Ireland don’t have quarterly transaction fees, if you keep a minimum of €3,000 in your personal current account at all times. You will still pay the €5 quarterly maintenance fee.
Banks will still charge for certain transactions, such as unpaid direct debits and lost debit cards. When choosing the right account for your needs, Irish comparison website, bonkers.ie, helpfully lays out the offering from all the Irish banks — comparing their fee offers and showing their other charges.
If you switch, contact the bank where you want to open your new account. They will supply you with a switching pack, containing a description of all of their current accounts, as well as a step-by-step guide to what you need to do when switching.
Once your new account is open, you need to agree a switching date. Choose the time of least activity on your account, avoiding pay day and avoiding the date of major debits, like mortgage or rent. Your new bank will ask you to complete an account-transfer form, which they then send to your old bank. If you run into any difficulties when switching, you can get advice and assistance from the Competition and Consumer Protection Commission, at www.consumerhelp.ie.
If you want to manage without a bank current account, there are a number of options. Many Irish credit unions now offer current accounts into which your wages can be paid and to manage bills. A small-but-growing number also offer ATM cards with their current accounts, and there are plans to extend their debit card services. Some branches also provide internet banking. The offering varies, so contact your local credit union to see what services they have available.
If you only need your current account for paying bills, An Post may have the service for you. They offer three ways to pay bills with them, all of which are free of charge.
You can choose to pay almost any bill at your local post office, at a PostPoint retail outlet, or online at www.mybills.ie.
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