Ulster Bank is to raise the threshold for free transaction banking on personal current accounts to €500 as part of its review of all fees and charges.

Up to now, any personal current account holder qualified for free transactions as long as their account remained in credit.

Ulster Bank is increasing 14 of its 70 charges, cutting five charges and eliminating two.

The bank said the changes were being made to establish a more equitable balance to charges over its range of products.

Its account maintenance charge remains at €5.08, while the most common transaction charges have either decreased or have seen no change. However, more people will be obliged to pay the charges.

Mr Kevin Gallen, head of corporate affairs and communications at Ulster Bank, said the changes would be phased in during May 2004 and that information would be posted to customers this week.

"Over 50 per cent of our existing customers will see no change, as they currently maintain over €500 in credit," Mr Gallen said.

In addition, students and people aged 65 and over qualify for transaction-fee-free banking.

The move means that National Irish Bank is now the only financial institution in the Republic offering free banking to all personal customers whose accounts are in credit.

At Permanent TSB, mortgage customers and people who hold a balance of €1,000 or more do not pay current account maintenance or transaction charges.

Meanwhile, IIB Homeloans has cut its interest rates on fixed-rate mortgages by 0.1-0.2 percentage points. IIB now provides the cheapest two- and three-year fixed-rate mortgages, overtaking First Active.