Most banks offer special rates for people over the age of 55 or 60, which include reduced transactional fees and preferential interest rates on fixed deposits.
But there are catches: lower or zero costs are mostly conditional on you maintaining a fairly substantial minimum balance in your account, or a substantial amount in a linked savings account. Another condition of avoiding high charges is that you make use of technology.
Not all pensioners have substantial savings that they can use to maintain a high minimum balance. And many older pensioners are set in their ways, including banking the old-fashioned way: not able, or inclined, to use electronic channels such as the internet. They are among the most vulnerable in our society and, given the high crime rate, may justifiably be afraid of withdrawing cash at an ATM, preferring to go into a branch.
Arrie Rautenbach, chief executive at Barclays Africa Retail Banking, suggests the following ways in which a pensioner who cannot maintain the minimum balance required for a reduction in fees, and has not found his way around electronic banking, can reduce his fees:
- Do not accept cheques as a form of payment. Ask to be paid via an electronic funds transfer (EFT), which reflects within seconds on your account. This is much safer and is free.
- Instead of using the branch for cash withdrawals, make use of till-point withdrawals at major retailers, such as Shoprite, Checkers, Pick n Pay and Spar.
- Instead of writing out cheques, use telephone banking to make payments, at a fraction of the cost. An alternative is to make payments to merchants via point-of-sale terminals using your debit card.
By following these steps, the pensioner in the above scenario can save 66% in charges at Absa Bank.
For a full list of senior packages offered by the major banks, please click the link below.