Savings accounts that save

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.

6 thoughts on “Savings accounts that save

  1. Anonymous

    thanks Banks. love ur page
    this issue of charging per month have made me not move from my jumbo scholar account, been holding on it since i was in first year of college. Now am out of college n working, still going strong on it as i earn interest, it processes salary…. all at NO charge, only 25/- for ATM access.

    only pro is that i cant get a loan on it. i have been shopping for a savings account to move to for a while, but the prices r so shocking. tis good news if i can maintain a balance n save free of charge. hope it works soon cos my age is high above the jumbo scholar.. even tho am doing ma MBA

  2. Ruheni

    ..good outlook! At the moment I bank with CBA, hv online access to my account (saving) and there are no charges imposed on it as long as I maintain the minimum balance. The only negative thing is that the interests earned are minimal and almost go pari with the tax on savings. Futher, beeing abroad the exchange rates CBA offers when I transfer Euros to my account are the worst in the market. I’m considering switching to Equity Bank that offers better rates and has onlne access. CFC would have been an optiobn but they don’t offer online banking..

  3. Mitzy

    @ Banks, are such service fees regulated or does it just depend on what the competition will allow, such that diff banks charge at their own discretion? It feels like one is tipping the clerks and tellers!

  4. bankelele

    Anon: stick with your bank where there are no charges

    Ruheni: good to know about CBA (it is one of the best banks for Kenyans who live/commute overseas) – but you have to be organized to bank there. withdraw more than once a month and that will cost 500/=.

    Prousette: 200 was a below minimum fee. waiting for all banks to fall in line

    Mitzy: more on ‘tipping’ of tellers
    coming. though bank charges go to the bank – not the teller. One of the charges that annoyed me the most was at one bank that charged 500/= if one deposited cash not cheques

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