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Feb 2019 - Open a Bank Account

Author: Money.Life | Date Posted: 22 Jun 2018

  • Why is it Important to have a Bank Account

    Security, convenience and earning interest are possibly the three most important reasons to open a bank account. A bank account will also help you to manage your spending and saving habits.

    Having more that one bank account is a really good idea as this will help you manage your budget better. Open an account to use for all your routine spending and a second account for saving. Ideally you will want to have more than one saving account - short term saving and long term saving.

    It really important to do the research so that you open the right bank accounts for your specific needs. So hit the malls and investigate what your options are..

    Opening an account at the same bank that your parents bank may not be the right solution for you. However once you are informed you may find that their bank  is the right option for your specific requirements OR you may have found a better option to meet your needs.

  • Bank Charges

    Bank Feesthe banks are fairly competitive and there are differences between the fees charges by the different banks.

    It is important to review the fee breakdown across the different accounts and student accounts available, so that you understand these.

    Some banks offer a set service fee for a bundle of services, compare these to the other banks as you may find that the set service fee is higher than the indiviual fees charged for cash withdrawals, card swipes, cash deposits etc.

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    What is FICA?

    FICA - Financial Intelligence Act - this has been put in place to prevent unlawful financial activities and also to help keep the money of South Africa citizens safe. The purpose of FICA for the financial institutions like banks is to ensure that they know who they are doing business with, in the event of any illegal activities.

    When you open a bank account you will need to take the following with you in order to open the account. A valid South African ID Card, Green ID book or birth certificate. Proof or residence, as you most probably reside with your parent or guardian you will need their proof of residence document and a letter which confirms that you reside with them at the address.

    A copy of one of the following documents can be used to verify residence - electricity bill, telephone account, official correspondence from South African Revenue Services, a valid TV license or a bank statement from a different bank. 

    Note that none of these documents may be older than three months.

  • Open a Savings Account

    There are 4 different types of saving account to consider.  

    A regular savings account is an account where you can have immediate access to your money by simply drawing this out at the ATM or transferring via internet banking. You will find that won't get a particularly good interest rate.

    The other option is a call account. This is as the name implies; you will need to call your bank to give them notice that you want to withdraw money, this usually takes about 24 hours.

    Notice deposit accounts are investments made for indefinite periods. It is important to take note that you cannot access your money until the notice period has been served. Some banks have 21 day notice period, a 32 day notice period is the most common and you will find 61 day period or even longer. The longer the notice period the higher the interest rate you will receive. You need a minimum amount to invest and this varies from bank to bank. Most of the banks will offer you a tiered interest rate, in other words the more you invest or keep in your account this higher your interest rate. This is a good option for your long term saving.

    A fixed deposit account is an account where you specify in advance the investment period, this could be from one month to five years. A fixed deposit account would typically give you a fixed interest rate over the term that you have specified. You will therefore get a guaranteed minimum interest rate, but if interest rates increase so will the interest rate you earn.

  • First National Bank

    FNBy - FNB offers two different student accounts. They are referred to as FNBy. For students under the age of 18, the account has no monthly fee, but is more limited in terms of transactions available. The second youth account is for age 18 to 26. It is a fully transactional account and has a monthly fee.

  • Nedbank

    Unlocked.Me Student Account and MyPocket Savings Account - the Unlocked.Me account has a fixed monthly fee for card swipes, Nedbank ATM withdrawals etc, there is a fee charged for cash deposits. You can link up to ten MyPocket saving accounts to the Unlocked.Me student account.

  • Standard Bank

    Student Achiever Account - this account is for youth between ages 16 and 23 who are at school or studying and have an income less than R3000 per month. There is a small monthly fee which supports a maximum number of debit transactions and cash withdrawals. Once the maximum is reached a small fee is charged per transaction.

  • Capitec

    Global One Account - the Global One Account is the single account type offered by Capitec. The requirement is to keep a minimum balance of R25 to keep the account open. Capitec offer a number of different saving accounts and the Global One Account offers an attractive interest rate.

  • ABSA

    MegaU or Student Silver - a MegaU account is for students up to age 19. You need to keep a balance of R300 in the account and then there will be no monthly fees. Once you turn 19, you can either migrate to a Student Silver account if you are studying or to a Absa Transact Account which is a low cost pay as you use account for someone earning R3000 or less a month.

Money Life

"Money won't create success the freedom to make it will" - Nelson Mandela

Do I really need a bank account?

Accessibility and safety are the biggest reasons to have a bank account. Having your own bank account will also give you access to your money from multiple locations without having to carry a lot of cash. You also don't run the risk of cash burning a hole in your pocket.

A lot of people find having a bank account makes it easier to manage your finances. You can use your bank statements to keep track of what you spend vs. the budget that you have set.

You will also find that a bank account will offer a better interest rate on your savings compared to your piggy bank or mattress. Remember to spend time doing your homework to determine which account or accounts are best for your requirements.

 

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