KBC current account holders need to switch to a new bank asap

[Markel]

I heard on RTE this week a financial adviser was telling people just to wait and see what happens and no rush at all in worrying about closing a KBC account. Seems to think that other banks will be clambering to entice switchers. I remain to be convinced....

rte.ie/radio/podcasts/22024698-switching-banks/

 

[AndroidMan]

Looks like there no free banking alternatives now. Is that correct?

 

[Brendan Burgess]

Thanks Markel

He has some weird ideas

"KBC and Ulster Bank won’t exist anymore so why don’t they buy the bank account number when they are buying the book"

He said that according to the CCPC website, there is only one account with free banking. KBC has a free account if you lodge €2k a month. EBS and N26 have free accounts, but they don't do overdrafts.

You cannot get a full banking service free of charge. Nor should you.


Brendan

 

[JohnJay]

BOI would be mad to take over all the KBC current accounts. A lot of KBC account holders are getting free banking, BOI wont want to take their accounts on those terms. They will be happier if everyone closes their KBC current account and a percentage of them open a new BOI current account, paying their full charges.

 

[Brendan Burgess]

A lot of KBC account holders are getting free banking, BOI wont want to take their accounts on those terms.

Very good point!
It's going to be awkward for BoI to deal with the KBC customers who have a mortgage with them who are availing of the 0.2% reduction in the rate and have free banking.

Brendan

 

[nest egg]

hanks Markel

He has some weird ideas

"KBC and Ulster Bank won’t exist anymore so why don’t they buy the bank account number when they are buying the book"

He said that according to the CCPC website, there is only one account with free banking. KBC has a free account if you lodge €2k a month. EBS and N26 have free accounts, but they don't do overdrafts.

You cannot get a full banking service free of charge. Nor should you.


Brendan

To be fair to the guy, he's doing his bit to improve financial literacy through his TV programmes. That being said, in that radio piece, suggesting the traditional banks have much interest in current a/c customers, and will be willing to transfer them over, in an era of negative interest rates, is probably setting false expectations.

With all these people on the move though it seems like an ideal opportunity for challenger banks to come in and gain market share quickly. There's been talk of Starling Bank's arrival for a while, I hope they, and others, spot the opportunity.

 

[Brendan Burgess]

The main issue is that people should move as soon as possible.

He said that people don't need to do anything.

Neither should he be falling into the populist trap of "the account with no charges is the best." I get asked by journalists all the time to talk about bank charges and I refuse. I say "Come back to me when you are doing a piece on mortgage rates."

Whatever he does elsewhere is not relevant to this issue.

Brendan

 

[tomdublin]

It's true that people aren't always best served by choosing a current account based on charges alone (e.g. if it's linked to their mortgage), but bank charges are still very much a valid consumer protection issue. Some people pay hundreds a year to their bank for various account maintenance fees, debit card charges etc, and I suspect that some might not be aware how much they are paying and how easily they could avoid those charges. Just to have a rough guess, if two million bank customers pay 100 a year that's 200 million wasted. It's clearly an issue that deserves more publicity.

 

[Brendan Burgess]

100 a year

€2 a week for a full banking service?

Or are you better off with a free service that doesn't give overdrafts or has other limitations?

Lots of people "saved" €2 a week by opening a ptsb current account and then ended up paying about €2,000 a year in extra interest on their mortgage and were stuck with ptsb's high rates.

Brendan

 

[tomdublin]

€2 a week for a full banking service?

Or are you better off with a free service that doesn't give overdrafts or has other limitations?

Lots of people "saved" €2 a week by opening a ptsb current account and then ended up paying about €2,000 a year in extra interest on their mortgage and were stuck with ptsb's high rates.

Brendan

Agreed but those people made an unwise choice by not considering all factors before switching accounts. All I'm saying is that there must be those who don't need full banking services (e.g. overdraft), who could switch current accounts without switching their mortgage (or who don't have a mortgage) and who could therefore save a lot of money. If you pay 100 per year that's 200 pre-tax income, i.e 2000 per decade. If someone does not need or care about that money that's fine but then perhaps they should consider giving it to charity instead of donating it to BoI or AIB. I think this is a valid consumer protection issue which doesn't get enough coverage.

 

[Brendan Burgess]

If you pay 100 per year that's 200 pre-tax income, i.e 2000 per decade.

It's €100 per year.

And a 1% saving on a mortgage of €240k is €2,400 per year.

You can mess around with gross income and multiply it by 10 if you wish to, but €100 for a bank account is actually good value for the service that you get.

Paying €2,400 extra is not good value.

And most people worry about bank charges and not about mortgage rates.

Whoever came up with the expression "Look after the pennies and the pounds will look after themselves" has a lot to answer for.

Brendan

 

[Wiresandmore]

I’ve found the “penny-wise, pound-foolish“ expression to have a lot of mileage!

 

[Baby boomer]

It's €100 per year.

And a 1% saving on a mortgage of €240k is €2,400 per year.
......

Absolutely, you're quite correct.

BUT, why not go for both? Of course you should aspire to save the €2400 on the mortgage. But the €100 is not to be sneezed at either.

As a general rule, service providers make money by aggregating products. Consumers save by disaggregation.

 

[NoRegretsCoyote]

People "paid" for bank accounts for years via the bank giving them low interest on their current account balance and lending it out profitably at higher rates.

Banks can't do this any more because interest rates are so low, so are charging explicitly.

But you are paying now like you did ten years ago, just in a different way.

 

[Brendan Burgess]

Hi Baby

The way to assess any product is to look at its different features including price.

For a mortgage, they key issue is price. Other issues might include getting the highest amount possible.

For your bank account, the key factors are the ease of use online and via the app. Then the availability of an overdraft facility. The location of a physical branch would be important for some people. The quality of the customer service generally would also be important.

If you can get all these and free banking, fair enough. But otherwise, I would not include the fees as a factor. I don't mind paying €100 a year for the service I get. I would resent paying 4.5% on my mortgage.

Brendan

 

[Steven Barrett]

Switching my direct debits to my new account. It's amazing and frightening how much companies don't want to be contacted by the public. No email addresses on websites, no ability to change bank details online, some not accepting new direct debits by email, only post. Long waits of over 20 minutes just to ask someone what their company email address it. It's a shambles

 

[Ndiddy]

Anyone can go ahead and open the likes of Revolut or N26 now and get a backup in place free of cost. No real need to panic just yet but definitely worth getting things started at this stage, even for Ulster with at least 6 months to go.

I do really hope some IE IBANs show up outside of the main banks before KBC/Ulster close up to give us some more options. Running into the IE IBAN only restrictions, even with the SEPA IBAN discrimination stuff is fairly common.

which companies have issues with non IE Ibans?

 

[ryaner]

which companies have issues with non IE Ibans?

I've heard of multiple people having trouble with the likes of broadband or utility providers. More recently a friend tried to get his work to use an N26 account and was told their payroll software couldn't accept anything non IE as it hadn't been updated yet. If he wanted to be paid on time, he needed an IE account.

I know personally I have to jump through a few extra steps when paying to non IE Ibans and can't setup standing orders to them.

 

[Steven Barrett]

And most people worry about bank charges and not about mortgage rates.

Whoever came up with the expression "Look after the pennies and the pounds will look after themselves" has a lot to answer for.

Brendan

Ha! I get something similar to this a lot. Clients tell me that they shop in Aldi and Lidl. I tell them I'm not concerned about whether they save a few euro each week. I'm more interested on whether they are spending €100,000 on a car or have massive debts.


I have no issue with bank charges either. Between business and personal banking, I am using my banks accounts several times a day. It costs money to develop and maintain the online services that allow me to avoid using a branch. Paying €6 a month in fees is pretty reasonable considering how much I use them.

 

[tomdublin]

was told their payroll software couldn't accept anything non IE as it hadn't been updated yet.

As far as I know the anti-discrimination rule has been in place for years and such rules are at the core of the EU single market. Businesses that refuse to comply should be reported.