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January 2006
Everyman's economy
Focus
Everyman's economy
Manufacturing slowdown on the cards
The strengthening rand remains, as ever, a double-edged sword. While the latest manufacturing production figures show healthy growth, there are worrying signals of a slowdown in domestic demand – caused, it seems, by cheaper imports due to the stronger rand.
Standard Bank researcher Rashika Lalla writes in the bank's economic newsletter that manufacturers are facing softer local demand due to two factors.
"Firstly, anyone in the market has a choice between domestically manufactured goods or imported items, which due to a stronger exchange rate is now more affordable.
"Secondly, a softer support base from domestic demand appears to be looming, as the stimulus from the interest rate cuts wear off. In other words, consumers who have purchased new homes and cars during this era of low interest rates, appear to be consolidating their debt levels and spending more conservatively. Recent data regarding retail activity, house price growth and credit extensions attest to that."
Focus on Personal Finances
How electronic banking saves you money
In December we looked at the operating costs and monthly service fees involved with electronic banking. This month we'll discuss a selection of electronic transaction costs and compare them, where possible, to in-branch costs.
Electronic banking cuts out bank tellers and paperwork, so it's cheaper than doing your banking at a branch. We've selected a few examples of some transaction costs to illustrate what you can save by doing your banking electronically. Our aim is not to compare banks, but rather to use basic examples to show how much cheaper electronic banking is.
To keep the illustration simple, we have used individual banks in each example (based on the fact that across the entire banking sector, electronic banking is cheaper). The examples are based on costs of a cheque account. Please note too that although these prices were correct at the time of writing, banks undergo regular reviews of their charges; so ask your bank for their latest pricing guide.
Cash withdrawal (using Nedbank as an example)
- In branch: R1,10 per R100, but with a minimum charge of R17
- From the ATM: R2,85 plus 90 cents per R100
This means that a withdrawal of R500 will cost R17 in the branch, but R7,35 from the ATM, a saving of R9,65.
Balance enquiry (using ABSA as an example)
- In branch: R2,45
- ATM: R1,00
- Internet: Free
- Telephone: Free if using voice recognition (R2,45 if speaking to a consultant)
- Cellphone: R1,00
Mini-statement (using Nedbank as an example)
- In branch: R7
- ATM: R2,75
- Internet, telephone, cellphone: free
Full statement (using FNB as an example)
- In branch: R3,50
- ATM: R2,50
- Internet, telephone, cellphone: free
Account payment (using Standard Bank as an example)
- In branch: R3,00 plus 1,1% of payment amount, to a maximum of R27,00.
- ATM, Internet, telephone and cellphone: R3,00 plus 0,55% of payment amount, to a maximum of R14.
This means that an account payment of R500 will cost you R8,50 in branch and R5,75 electronically – a saving of R2,75.
Transfer funds between your own accounts (using Nedbank as an example)
- In branch: full service fee
- ATM, Internet, telephone and cellphone: 55% of full service fee
Electronic banking saves, but use it wisely
These examples show that electronic banking transactions can cost up to 50% less than over-the-counter transactions. But remember that electronic banking can cost you if you don't use it wisely! A prime example of this is doing transactions at an ATM other than your bank's ATM. Using FNB as an example, an FNB client will be charged R5,00 for withdrawing R500 from an FNB ATM, but will be charged R10,75 for withdrawing the same amount from a Saswitch ATM. So to keep your ATM banking costs down, always use your own bank's ATMs.
Is electronic banking safe?
Unfortunately, electronic banking has legitimately attracted concerns about security, and we will be discussing the security of this mode of banking in the next couple of issues of Money Matters.
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