AIB, the Republic's biggest bank, will offer free banking to current account customers who use its phone, internet and debit cards for at least one transaction starting from May 27th. The move, announced yesterday, follows similar initiatives by Bank of Ireland, Permanent TSB, Ulster Bank and National Irish Bank in recent months.
Some 700,000 of AIB's 1.2 million current account customers who already use these services will immediately benefit, yielding average savings of about €1 a week, according to the bank.
Up to 270,000 students and AIB customers over 60 years of age already get free banking.
It hopes that its new offering will encourage AIB's 500,000 other current account customers to register to use its internet and phone banking and to get a debit card to avoid paying fees.
The bank introduced its Maestro debit card last year which allows customers to pay for purchases directly from their current account and to get cash back at shops or from ATMs.
Announcing its free banking offer, AIB managing director Donal Forde said the bank was opening 10,000 current accounts a month on average and this initiative was the first in a series to be announced to its retail banking customers.
"A market leading personal banking offering must go further. It must combine fee free options with other key areas of importance to customers such as comprehensive branch and online facilities and good value loan and deposit offerings," he said.
AIB estimates that the abolition of fees will cost the bank about €25 million over the next 12 months. Last year AIB said it handled 25 million log-ons and seven million transactions.
Bank of Ireland, which offers free current account banking to customers who maintain a balance of €500 and use its internet or phone banking service three times a quarter, said it had no plans to change its offering. A spokeswoman said it was continuing to monitor the competitive environment.
The free banking offerings follow the adoption of a new account switching code to make it easier for consumers to switch their current account to institutions that offer a better deal.
