The Reserve Bank’s latest annual survey on banks fees shows Australians paid $11.3 billion in bank fees in 2011. Most media commentary focused on the fact that bank fees for householders fell, but thanks to an increase in business fees, banks’ total income from fees rose by $100 million or 0.7 percent
The figures show that many of us, particularly business customers, are still paying too much in fees.
Of the 11.3 billion, businesses paid a whopping 7.3 billion in fees. While fees paid by households came down $300 million or by seven per cent, business banking fees went up by $400 million of 5.5 per cent. The year before, the amount of bank income derived from fees to business grew by 13.7 percent.
Fee income from business loans rose by 4.2 per cent, while fee income from bank bills rose by 23.2 per cent as banks re-priced establishment fees and line fees. These fees now account for just under half of all fee income earned by banks from businesses, compared with around 39 per cent five years ago.
Due to increased competition, business deposit account fees and exception fees fell. These now make up nine per cent of total business fees, down from 17 per cent five years ago. Merchant service fees, the fees for operating EFTPOS and credit card facilities, rose by 3.9 per cent.
Check your bank statements or ask your financial institution to tell you how much you are paying in fees. Ask your business banker for advice on how to reduce those fees.
You shouldn’t be paying account keeping fees on everyday transaction accounts. Using internet, phone or mobile banking as well as your own financial institutions’ or their networked ATMs can save you some dough.
When borrowing, ask your bank to explain their fees, particularly loan fees. They should be passing on costs, rather than making major profits from fees.
Greg Taylor is deputy CEO and chief financial officer for the Hunter-based Greater Building Society. This article appeared in the Newcastle Post and Hunter Post July 4 2012.