Where is the safest place for your money? Each bank has its own perks and drawbacks Picture: Pixabay
It’s a New Year and time to eat the frog. Some of you will know what that means - identifying one task that you know you must do, but you don’t really want to, because it might be difficult or time consuming or it’s just a distraction that’s keeping you from doing things you actually enjoy doing.
Anyway, I’d say from a financial perspective, moving current account providers falls into that category.
We promise ourselves we’ll do it, but very few actually follow through. But hey, it’s a New Year and maybe a new you, and now is probably a good time to take action when motivation levels are high.
And for some, they are going to be forced into moving providers this year whether they like it or not.
The clock has already started ticking, if you have a current account with either Ulster Bank or KBC.
Because both are exiting the Irish market, you’ll have to make arrangements to move your current account from them, with Ulster giving their 500,000 account holders six months to make alternative arrangements.
KBC are being a little more generous because they’re telling us that probably by the end of the year, we’ll have to have found a new provider.
With both leaving, there are still eight providers remaining that we can choose from, so let’s take a quick look at what they can offer us and what they will charge us if we decide to move to them.
Bank of Ireland
They have an annual charge of €72 which comes in the form of a monthly €6 fee regardless of usage. They have recently made available Google and Apple pay to account holders.
They charge an admin fee of €4.50 per quarter or €18 per year, but they also charge for specific transactions, like direct debit/standing orders at 20c, cheque lodgements/written at 39c, transactions in branch 39c, machine lodgements 35c, ATM withdrawal 35c, debit card transaction 20c, although their contactless transactions are free.
You can avoid fees if you have a student or graduate account, or if you’re over 66 years of age.
And if you have an AIB mortgage and pay your monthly instalment from an AIB current account, you can avoid transaction and maintenance fees.
Their monthly manager account currently doesn’t charge any monthly admin or transaction fees. They don’t have a minimum monthly lodgement requirement either and it’s a good account if your usage and requirements from a current account are low i.e. you don’t want a cheque book or overdraft and you don’t need access to Google or Apple Pay.
Their explore account has a monthly maintenance fee of €6 but you can reduce this by €5 depending on your usage.
The account has a cashback facility where they will pay account holders 10 cent for every debit card purchase, including point of sale transactions and online shopping, up to a maximum of €5 a month.
So, if you make 50 debit card transactions every month, the monthly maintenance charge effectively reduces to €1.
The account also offers cashback on certain bills that are paid by direct debit and 2% cashback on monthly mortgage repayments until 2027, once the mortgage is with PTSB and paid from the Explore Account.
N26 is licensed by the German Central Bank so if you have money on deposit with them, you are covered by the German Deposit Guarantee Scheme up to €100,000 so the guarantee is the same as it is with any Irish bank.
They have no account maintenance fees and all day-to-day transactions are free.
The only transaction fee is applied on Irish ATM withdrawals. You’re allowed three ATM withdrawals per month without them attracting any charge, but after that there’s a fee of €2 charged every time, you do.
They have a €5 monthly maintenance fee on their Smart Account which covers contactless payments, direct debits, mini statements, one cash withdrawal per week at a post office, online purchases, online transfers, and point-of-sale transactions.
They charge 60c for ATM withdrawals, which reduces to 50 cent if the money is taken out from a branch, and there's also a 50c charge for any cash or cheque lodgements at a Post Office branch as well.
They have introduced some innovative features to their offering which allow users to save amounts into dedicated “jars” i.e. you determine what each jar is going to be used for which I really like.
And you can also avail of a round up feature which allows you to round up the difference of a debit card payment to the next number where the difference is put into a jar of your choosing.
So, if you buy something for €3.90, they will put €0.10 into a jar, and you can even choose a multiplier option where the rounded-up amount is multiplied by an amount of your choosing.
Launched in 2019, about 200 Credit Union branches offer a current account facility.
Typically a monthly maintenance fee of €4 which is charged to your account every quarter and after that all your day-to-day banking is free.
Although they only offer five free ATM withdrawals per month, after which 50c is charged per withdrawal.
They offer an overdraft facility and charge a once off fee of €25 for setting it up and a similar cost is charged every time you renew it.
They are currently licensed operate using a banking licence in Lithuania. And because of this, customers in Ireland aren't protected by any Deposit Guarantee Scheme.
They have a standard plan that has no monthly fee where your first 5 ATM withdrawals are fee or the first €200, then a 2% fee applies.
You could choose their Plus account which costs €2.99 per month where the first €200 withdrawn is free then a 2% fee follows, or you could opt for their Premium account which has a €7.99 monthly fee where the first €400 is free and then 2% or their Metal account which is €13.99 per month where the first €800 is free and then the same 2% as with other accounts follows.
They also have a facility where the account holder, can view their spending habits, you can lock and unlock their cards as well as set monthly spending limits, and you can also buy shares on their platform and you can use your account to trade a number of different cryptocurrencies as well.
So, what’s it like moving from one bank to another?
Under a code of conduct, developed by the Central Bank which came into effect in October 2010, if a person wants to switch current accounts, their existing bank has to provide you with a switching pack.
In this pack is an account transfer form that you need to sign and it indicates what direct debits, standing orders etc. you wish to continue to be paid from your new provider. So, you give this form to your new provider who will then send it to your existing provider.
So the switch is really quite easy and under this code by the way all of the switching has to be completed within 10 days.
Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can be contacted at firstname.lastname@example.org or www.harmonics.ie
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