New changes to banking act forbid banks’ from imposing charges on savings account holders as long as they maintain the minimum balance. This will promote a culture of savings, which is important even as real savings rates are negative.
(Here’s a snapshot (PDF) of some of these charges from 2 years ago
This week, I closed a savings account because, when I got my (half-yearly) statement, I realized that they had been charging me 200 shillings ($2.9) a month. Even as I opened a different savings account within the same bank, the account rep. said, despite my protests, that the new savings account would attract a 25-shilling per month fee. I also got dinged 300 shillings for transferring the account.
No bank has yet come out and declared how they would abide by the new rules, but it takes long to right a ship and it will probably take a few months to rework their savings products with new brochures, IT codes & account parameters.
Of the last few years savings accounts have become hybrid account that have ATM cards, visa cards, electronic banking & SMS access etc. – all of which banks could extract a fee for the extra services to account holders.
To comply with the changes, banks are likely to come out with plain, no frills savings accounts. They will adjust the minimum fee appropriately but have no more ATM cards or extras – just money sitting in the bank earning intrest, and not reduced by bank charges.