Angelique Ruzicka takes a look at the bank account offerings for students, as banks try to entice a younger crowd with reduced or zero fees in the hope of bagging a client for life.

In March, Absa ditched fees for all of its student cheque accounts.

Cowyk Fox, managing executive: everyday banking at Absa retail and business bank, says: “Since the onset of Covid-19, we have actively sought to provide financial relief to our consumers through the various stages of the pandemic. The new Absa Student Cheque Account offer is the latest step in our customer relief journey and will be free for students.”

But are student bank accounts free when it comes to all aspects of banking? We take a look at some of the common fees levied by banks and whether they apply to the typical transactions conducted by students aged 16 and over.

Monthly fees

Absa: Absa has scrapped its monthly fees on all student bank accounts.

FNB: The FNBy Next account is marketed at students aged between 18 and 24. There are two pricing options to choose from: Pay As You Use, which has no monthly account fee, or the bundled pricing option which has a R12 monthly account fee.

Nedbank: When it comes to zero monthly fees, Absa is not unique. Nedbank’s Unlocked.Me also doesn’t charge monthly maintenance fees and applies to students aged 16 and up.

Standard Bank: The bank’s MyMo Pay as You Transact (PAYT) account has a monthly management fee of R4.95 and applies to students aged 16 and older. Students 18 and over can apply for the MyMo Plus account but this has a fixed monthly fee of R110 for a bundle of services.

Cash withdrawal fees

Sometimes students have no choice but to withdraw cash for things like taxi fares. Some of the big four banks apply charges for withdrawing money but savings can be made if students stick to their own bank’s ATM, make small cash withdrawals, or withdraw money at participating shop till points.

Absa: No cash withdrawal charges. Fox adds: “There’s the added benefit that we’ve got one of the largest ATM footprints in the country.”

FNB: FNBy Next account holders get free cash withdrawals at FNB ATMs up to R1 500.

Nedbank: Unlocked.Me account holders pay R8 per R1 000 cash withdrawn from Nedbank ATMs.

Standard Bank: The MyMo PAYT account charges R7.50 per R1 000 or part thereof at Standard Bank ATMs. MyMo Plus has free withdrawals up to R5 000 at all ATMs.

Deposit fees

Generally, deposit fees can be kept low or whittled down to zero if students deposit small amounts and keep to their bank’s own ATMs. Stepping outside of these rules, however, will incur fees.

Absa: Students get unlimited ATM cash deposits.

FNB: FNBy Next students get free cash deposits at FNB ATMs for deposits up to R3 000.

Nedbank: There are no fees on cash deposits of up to R3 000 at Nedbank Intelligent Depositor ATMs.

Standard Bank: The MyMo PAYT allows free deposits up to R1 500 but thereafter a fee of R9 per R1 000 or part thereof applies. MyMo Plus has free cash deposits up to R5 000, whereafter a fee of R9 per R1 000 or part thereof applies.

What about general bank accounts?

Other bank accounts that students could consider are Capitec’s Global One account, Old Mutual’s Money account and African Bank’s MyWorld account.

These accounts aren’t specifically designed for students but do still offer value for money if used smartly and if a student earns enough money from full- or part-time work that covers the extra fees.

Capitec’s Global One account is open to anyone, provided they keep a minimum balance of R25. The monthly administration fee is R5. Cash withdrawals at a Capitec Bank ATM are R7 per R1 000, but withdrawing from another bank’s ATM will cost R9.75 per R1 000. Capitec charges R1.20 per R100 deposited at cash-accepting ATMs.

Old Mutual’s Money account charges an admin fee of R4.95 a month. For that, students get a transactional and savings account. Cash withdrawals cost R12 per R1 000 if cash is withdrawn from an ATM. Cash deposits at Shoprite, Checkers and Usave stores cost R12, while a fee of R19.95 applies at PnP and Boxer stores.

African Bank’s MyWorld account does not charge a monthly fee. You get a transactional account together with a Savings and Power Pocket account. Anyone over 18 can apply. Cash withdrawals cost R6 up to R1 000 per transaction. A 2% fee is charged on deposits at cash acceptor machines. If you deposit cash at a retailer, a R5 charge for the first R500 applies, thereafter a charge of 1.75% is applied on values exceeding R500. Parents can pay the fees by opening their own My World account and giving their student child control over the linked Power Pocket account.

Neil Thompson, head of product and customer value proposition at African Bank, says: “MyWorld is perfect for parents of students at university because of its joint account benefits. It’s the ideal way to provide your child with a means to do proper banking and at the same time loosen the apron strings and allow them financial independence.”

Tips for students to get the most value out of their bank account

1. For cash deposits and withdrawals, stick to your bank’s own ATM infrastructure. Higher charges will apply if you use another bank’s ATM. If you need to use cash for any reason, such as a taxi fare, rather withdraw money at till points as charges for this are lower – generally around R1-2.
2. Swipe instead of using cash whenever possible. Banks generally don’t charge for swiping a card at the till.
3. If you choose a bundled account make sure you stay within the limits of your bundle, otherwise higher charges will apply.
4. Make sure that you’re not swayed by lifestyle deals when comparing bank accounts. Many offer discounts through retailers or food vouchers as perks. Tshiamo Molanda, head: Youth Segment at Standard Bank says: “The internet has made it easier to do a comparison of all the available accounts. Do proper research in terms of what is included as part of the package and what is not.”
5. Make sure you’re still getting a good deal once you’re upgraded from a student account. Charl Nel head of communications at Capitec says: “While student accounts initially offer little to no fees, traditional banks use them as a means to acquire clients for more expensive bundle accounts once students start working. These bundle accounts usually cost around R110 and factor in transactions that the client might not use.”
6. Transact digitally as much as you can. Most banks allow free electronic transfers and balance enquiries, but cash deposits and withdrawals, especially over the counter or at rival ATMs, attract hefty fees.
7. Find out if parents can pay. Yashen Singh, CEO of FNBPremium Core Banking, says: “Students can request for their account fee to be redirected to another FNB account on that person’s approval.”

This article first appeared in City Press.