Consumers should be aware of extra fees and charges when signing up for current accounts that banks advertise as being "free", the Irish Financial Services Regulatory Authority warned yesterday
While a survey released by the regulator showed that many Irish banks offer current accounts without maintenance fees, it also found that, in order to qualify for the no-fee accounts, holders often have to adhere to certain requirements, such as keeping a minimum amount of money in the account.
"The increased availability of free banking is a welcome development for consumers," said consumer director Mary O'Dea in a statement accompanying the survey. "However, people should be aware that some 'free' bank accounts have terms and conditions attached."
According to the survey, which examined eight current accounts provided by five Irish banks - Bank of Ireland, National Irish Bank, Permanent TSB and Ulster Bank - all offer a current account without quarterly transaction charges. AIB was the only one surveyed not to offer a "free" account.
However, Permanent TSB's Switch current account and Bank of Ireland's Pay As You Go account are the only ones that don't have any special requirements to qualify for the fee-free account. National Irish Bank's (NIB) two current accounts are only free while the account is in credit, otherwise the quarterly fee is €5. Ulster Bank also requires the account to be in credit.
Bank of Ireland, which first introduced what it calls "free" banking last November, has no quarterly fee on its Pay As You Go account, but requires customers to keep a minimum of €500 in their account and make three phone or online transactions per quarter in order to avoid paying 28 cents each for individual transactions such as laser and ATM, cheques and direct debits. The additional charges for individual transactions, where applicable, are also generally higher than at Permanent TSB.
Overall, the survey found that the lowest cost current account on the market is Permanent TSB's switch current account. The account was launched last year and signed up 67,000 customers during 2005. It offers free transaction banking whether the account is in credit or overdrawn, as well as no charges for individual transactions.
The current accounts offered by Ulster Bank, NIB and AIB are the only accounts to offer any interest on the credit balance.
The regulator also urged consumers aged 60 and over to be aware of their options as far as current accounts are concerned. The survey found that free current accounts are available for the over-60s at AIB, Bank of Ireland and Permanent TSB.
