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Accounts for elderly and children

Apr 15 2012 12:22 Maya Fisher-French

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GRANDPARENTS often want to open a bank account for their grandchildren to encourage them to save.

The problem with many existing products is that there is always a monthly bank fee that eats into the children’s savings.

While perhaps a good lesson in the cost of banking, such bank fees hardly encourage children to save their pocket and birthday money.

Bidvest Bank has since removed its R15 monthly account fee for all customers under the age of 21, and pensioners pay no transactional charges. The account makes it a very attractive offer for both grandparents and their grandchildren.

Kids’ banking

Parents who want to instil a sense of financial discipline in their children can, for example, open a Bidvest Bank account for their teenagers and deposit enough money each month to cover their entertainment and even basic living requirements, such as clothes and toiletries.

With no monthly fee and no charge for transactions at the till point, teenagers can manage their own money at no cost.

The account can also be used to save birthday and pocket money as the minimum amount to open the account is R50 and it pays out some interest, although limited.

The account does have fees for debit orders and ATM withdrawals, but if used as a basic transaction account to buy items using the card it is very cost effective.

Cash withdrawals can become expensive as Bidvest Bank has a limited number of ATMs – only 52 across the nation – and customers have to rely on other banks’ ATMs, which can be more expensive.

Customers can reduce their withdrawal costs by drawing money for R2 at major retailers such as Pick n Pay and Checkers.

However, if they use another bank’s ATM, it would cost about R11.50 to withdraw R500, for example.

Pensioners’ banking

Bidvest Bank has waived all fees for customers over the age of 65. This means free banking, even if the customer withdraws cash from a non-Bidvest ATM.

The only time fees will be charged is a penalty fee of R10 if a debit order is returned or for over-the-counter transactions, as opposed to ATM or internet banking.

Bidvest Bank also offers excellent deposit rates. For example, their 121-day notice account pays an effective interest rate of 6.5%, so a pensioner could keep their savings in the 121-day notice account and have the interest paid into their no-cost bank account.

Ordinary banking

For customers between the ages of 21 and 65, Bidvest Bank has capped the fees at R72 a month. This means that no matter how much banking you do, your fees will never exceed R72.

As it is a basic pay-as-you-use bank account, if you only do a few transactions a month your banking fees could be lower.

While not as competitive as Capitec Bank Holdings [JSE:CPI] for low transactional users, for customers who make frequent transactions every month this bank account could save a significant amount of money.

The downside is that Bidvest Bank branches are fairly limited, with only 52 across the nation and only found in major retail centres.

However, if a Bidvest branch is within reasonable distance and you want to open an account for your children or as a pensioner, this is definitely an account to consider.

 - City Press

 
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