Choosing a Bank Account

When you have a bank account, you give your money to the bank to look after and the bank agrees to give you access to your money whenever you need it. A bank account allows for quick and efficient way to have your income paid to you, to pay your bills and to monitor your spending habits. It also means that you don’t need to carry around a large amount of money, as you can use a debit card and cheque to pay for transactions or services. However, if you do need cash, you can withdraw money easily from your bank account via an ATM or at a branch of your specific bank.

There two types of bank accounts: 

• Cheque Account: This is an ideal bank account for everyday purchases and payments. It allows you to manage your money through the bank branch, ATMs, the Internet, telephone or through your cellphone, also known as mobile banking. You are usually also issued with a debit card and a cheque book which allows you to conduct payments and you can apply for an overdraft facility. This bank account usually doesn’t earn any interest or very little if it does.

• Savings Account: This bank account allows you to keep your money your money safe and earn interest at the same time. You are still able to access your money just like a cheque account to complete transactions, however whatever money is left in the account earns interest.  A savings account doesn’t give you access to a cheque book or an overdraft facility.

When choosing a bank account, remember the following:

1. Be aware of bank account fees

Most bank accounts will charge you a transaction fee every time you withdraw or deposit money into your account and when you pay for a product or a service with your debit card. Most banks will also charge you a monthly management or admin fee for allowing you to keep your money in their facilities. These fees will vary from bank to bank, so choose one that has reasonable banking fees. To lower your fees, avoid using cheques, as they tend to expensive, and limit the amount of ATM withdrawals buying doing as many transactions via the Internet and your cellphone, which tends to be cheaper.

2. Consider an overdraft facility

An overdraft facility is usually only available with cheque accounts. It allows you to withdraw more money from your bank account than what you actually have, giving you a negative balance. The bank will usually give you an overdraft limit and will charge you interest depending on how much your overdraft is. Any money deposited into this account will first clear the negative balance before you are no longer in overdraft. 

3. Think about how you'll access your bank account

Ensure that your bank allows you to access your bank account via the Internet or your cellphone. This allows you to log on to your bank’s website using the Internet on your computer or on your cellphone, and perform banking transactions such as paying bills, checking balances and transferring money between accounts. Some banks provide these services for free while some while charge you a small fee for this convenience.  Make sure that you will have easy access to your bank, whether through a bank branch that is close to where you live and work and even conveniently located ATM nationwide. 

Thinking of opening a bank account but not sure which to choose from? At ThinkMoney, we make things easy for you by letting you compare bank accounts in South Africa side-by-side. Do you want unbiased opinions of different bank accounts? Read our bank account reviews written by ThinkMoney users.