Steep bank charges on student accounts for unpaid direct debits, missed loan repayments and the replacement of a lost or stolen card have been identified in a survey of bank costs by the Financial Regulator.
In a survey of five banks, the regulator found charges as high as €12.70 for each unpaid standing order or unpaid direct debit in addition to charges for replacing a PIN, stopping payments and duplicating statements.
National Irish Bank (NIB) emerged with the highest number of charges on its "freedom account" for third-level students. In addition to the standard charges of €2.50 for a bank draft, €10 for each unpaid standing order or direct debit and €5 for a returned unpaid cheque, the bank has a further five charges which most banks do not levy.
Replacement of a stolen or lost card costs NIB student account-holders €6, cancelling a payment costs €5, replacing a PIN costs €1.25, credit transfers cost €0.75 and duplicate statements cost €4 per page.
Permanent TSB emerged with the least number of charges, each of which were the same or cheaper than those levied by the other banks. The survey also detailed the interest earned on credit balances, interest charged on authorised overdrafts and the surcharges on unauthorised overdrafts.
AIB charged the highest surcharge interest on an unauthorised overdraft at 9.03 per cent per annum, followed by Ulster Bank at 9 per cent per annum, the survey found. This compared to 7.2 per cent at Bank of Ireland and 6 per cent at NIB and Permanent TSB. Bank of Ireland emerged as the only bank to offer a nine-month interest-free travel loan and a nine-month interest-free grant advance overdraft.
Sharon Donnery, head of consumer information with the regulator, said that banks had ceased traditional incentive offers of mobile phones and music vouchers to try to win customers for life.
Because many bills were paid directly from a bank account, she urged students to ensure that they always had sufficient funds to avoid penalty charges.
"If you are thinking about taking out a loan, have a clear plan of how long you will need the loan for and how you will pay the money back. If you miss repayments, there may be extra charges, and you could damage your credit rating," she said. "Overdrafts are another option if you need to borrow, but remember to keep within the agreed limit, otherwise the charges can be considerable."
STUDENT BANKING: the charges
AIB
Standing order unpaid: €6.35;
Cheque/direct debit returned from account: €6.35;
Cheque lodged/returned unpaid: €4.44;
Referral item fee/overlimit item charges: €4.44
Bank of Ireland
Bank draft: €2.20;
Standing order unpaid: €12.70;
Cheque/direct debit returned from account: €12.70;
Cheque lodged/returned unpaid: €3.30
National Irish Bank
Bank draft: €2.50;
Standing order unpaid: €10 per item;
Cheque/direct debit returned from account: €10;
Cheque lodged/returned unpaid: €5;
Replacement of lost/stolen card: €6;
Stop payment instruction: €5;
Replacement PIN: €1.25;
Credit transfers: €0.75;
Duplicate statement (per page): €4
Permanent TSB
Standing order unpaid: €4.44;
Cheque/direct debit returned from account: €4.44;
Referral Item fee/overlimit item charges: €4.44 (€8.88 for two or more items per day)
Ulster Bank
Standing order unpaid: €12.70;
Cheque/direct debit returned from account: €12.70;
Referral item fee/overlimit item charges: €4.44 per day;
Stop payment instruction: €5.08;
Credit transfers: €0.51;
Duplicate statement per page: €3.81 first page; €2.54 thereafter
Source: Financial Regulator