Avalon’s Money Thread: Banks and Bank Charges.
I have to make clear at the outset that I do not accept that bank charges are fair at all. I know all the reasons: how can I possibly expect the bank to work for free; they aren’t a charity etc, but banks make enough money out of us as it is and they don’t need to make any more. You don’t pay Whitcoulls $5 a month for the privilege of being able to go in and buy a book – so why should you pay the banks to hold on to your money. They make money by investing your savings, or charging you higher rates of interest than they pay, when they lend you money.
I utterly object to being charged to spend my money. I don’t care what they charge or why they do it, it’s not their money, its mine! It’s a principle thing and at the end of the day no amount of justification for charges actually diminishes my principles.
Bank fees in New Zealand are ludicrous and applied for the most spurious of reasons. ASB will charge you for having to ask their permission to spend your money! (The netcode release fee is a charge applied if you wish to spend over $500 over the Internet. This is for “security”. (Theirs not ours by the way – and yes – having a hubby who works in IT Security – I do indeed get the inside track on just how much we are being expolited by the banks on this issue). Apparently the banks got stung by fraud and so introduced net code. OK we all need security but I have never had to ask permission to spend my money, not even when I was 5. As it’s for their benefit though, why do I have to pay? The online spending limit used to be $2500, but due to a phishing attack I now cannot spend over $500 via the Internet without permission.
As others have said, you can get round this. Everything in the New Zealand banking system seems to be negotiable, especially once you have a mortgage or an account with $50k in. There’s nothing to stop you asking your current bank to match the best offer you can get elsewhere, we did this with our mortgage.
Note: Nogotiating with the banks is a lot tougher right at the moment, but as with everything – once the “resession” is over – the banks will come round and be more ameniable.
You can wangle your way round fees, especially service fees such as getting bank cheques and moving large sums of money for bills etc if you get a good “Personal Relationship Manager”. If you cannot do this, careful use of the system can minimise fees even if you can’t stop them.
Firstly be aware that getting small amounts of cash from an ATM is EXPENSIVE. You can get charged upto 50c each time. So when you get cash, get amounts that make it worth it. It always cheaper to get cash back at the supermarket paying usually only 20c. Never get cash from another bank ATM on top of the 50c charge, you get another 50c charge and it really adds up. (Do that 7 times – that’s a cappuccino ) Decide how you handle cash, its different for everyone, but we now use cash much more than we did in the UK, where we thought nothing of using switch (eftpos) for sums as small as £5, now we have a minimum we allow of $25.
(Currently becuase we have a Mortgage account – we dont actually get charged anything for taking cash out – it’s included in our monthly “base fee” which is now non-negotiable!)
It is worth being aware that fee free banking is finally coming to NZ. It’s been here a while with the proviso that you keep minimum balances, often $3k-5k. Now some of the banks are offering no transaction fees on their current accounts. In some cases you can get no monthly base fee by opting out of being sent paper statements. I’m not so keen on that idea, but that’s because for me the statement arriving tells me its time to balance my accounts. You have always been able to negotiate your fees here, but it has tended to rely on having a lot of business with the bank (savings or mortgage or business accounts), but this change means the fee free banking is open to more people not just those of us with a fair amount of money tied up with the bank.
Current ASB charges:
Streamline account:
$3 a month base fee (waived if you have “Statement Stopper”)
$1 a month for a netcode token
25c each day you use Netcode
$2 to set up an automatic payment or bill payee.
Fastcheque is now free.
Their credit cards cost from $12 – $40 each every 6 months, and their credit card reward program costs $10 each for 6 months. Why they shoudl charge you to join the rewards program is beyond me – anything for a fast buck I guess!
Avalon’s Money Thread is a series of posts which were originally written in 2007 for an Immigration Forum. They came about by answering questions that forum members asked, about how to cope with the often difficult financial situation they face in New Zealand. They formed the basis of what was eventually to become the book Avalon’s Guide: after another year or so of drinking way too much coffee and finding out way more about taxes, money and investing that any sane person should.
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Related posts:
- Avalon’s Money Thread: Can I get a decent affordable mortgage?
- Avalon’s Money Thread: Revolving Credit Mortgages.
- Avalon’s Money Thread: Am I a Big Spender?
Comments
2 Comments on Avalon’s Money Thread: Banks and Bank Charges.
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Joseph C on
Tue, 22nd Sep 2009 9:56 am
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Avalon on
Tue, 22nd Sep 2009 11:01 am
Hi Avalon,
i thought I would mention that BNZ has a bank account called Total Money., In this it is acccount you are charged a flat $10 per month and you can do as many tranactions as you like within the month. You are entitled to 10 accounts in the Total Money Account.. You can even buy a newspaper on your Etpos card. It is nice to have an account that does not charge you for every tranaction. There is one catch, your statements will only be posted on the BNZ internet site.Using this account will save you heaps of money. Try it I think you will like it
Hi Joseph,
I actually do mention the Total Money account in the book, and explain how it works. I was really interested in it when it first came out, because its a much easier way to handle money than a Revolving Credit account. The only reason I dont have one is because when I went into BNZ to ask about it – the staff were just not at all interested in talking to me about it.
So I stuck with ASB.
Its a shame, because as you say, it is a good account, it just didnt exist when I originally wrote the Money Thread.
Hxxx
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