FNB and Banking Fees

[supersunbird]

The difference is you don't pay tax on the R450 saved on banking fees. For high (40/45%) marginal rate individuals, it makes more sense to keep the cash in the account than a high interest savings account.

There is a R23 800 pa interest tax exemption (first R23 800 interest earned does not get taxed). So that is no excuse...

 

[supersunbird]

Ah missed the minus. He should mention how much he have to spend to get that back.

I spent the same amount as I did when I was only with Capitec and at the same places as I did while I was only with Capitec (and over the last 3 months have earned R600 to R1000 cash profit, yes, after the banks costs).

But indeed, if you Capitec spend does not justify it, in some instanced ebucks do not work for some people.

 

[JayM]

There is a R23 800 pa interest tax exemption (first R23 800 interest earned does not get taxed). So that is no excuse...

Maxed out in money maximiser account already (as mentioned above).

 

[JayM]

Which implies you have R170k+ invested, which is great. But you suggested earlier that given the tax on interest, one should keep money in the cheque account.

For anyone maxing out their tax free exemption, yes it does. And that'll be a large number of people on private accounts with an adequately sized emergency fund (which I believe everyone should have).

Which begs the question. What are you talking about? You still haven't defended the idea of a "prestige" account except on the grounds that it lets you play games with eBucks and magically avoid tax.

Higher level account often gets you more ebucks. It definitely does in my case.

For the rest of us, paying ~R50 a month and earning some multiple of that back in interest is about the best deal that can be expected from a bank.

Agreed. But my point was that I'm not a sucker (as you put it) for seeking out the best possible banking deal. If you can point out a better option for my needs, then I'll take it up.

 

[Dylan_G]

No thanks, I'll stick to keeping my costs down and refraining from the stupid games invented by my intellectual inferiors in the interest of maximising the revenue earned from dummies and posers. The latter always lose in the end. As for your claim that the tax factor makes a 0%-earning account more sensible than an interest-bearing account, would you care to back that up?

https://en.m.wikipedia.org/wiki/Dunning–Kruger_effect

 

[silkenphoenixx]

https://en.m.wikipedia.org/wiki/Dunning–Kruger_effect

:crylaugh: :crylaugh: :crylaugh:

My 2c: I don't have any work expenses to claim back and I'm not a big spender. I used to be on FNB gold + CC and I more or less made my fees back in ebucks, but I had them "invested" in a flexi fixed deposit which I had just for that purpose. Had that running for two or three years.

My spending patterns started to change though, and FNB changed the ebucks rules so it was more difficult for me to keep the reward levels up. Also I started shopping in cash at farmers markets for most of my groceries so very little Checkers spend, and the account fees became not profitable anymore. Dialled back to a PAYU Easy Account, and it suits me fine for now.

I've looked at rewards programmes now and again and for some they may work, as mentioned here, if you're doing that kind of spending anyway. But in general, I do feel that they encourage you towards too much consumerism to be really worth it for the majority. I find that a more minimalist lifestyle is good for my soul.

The annoying thing is that I earn enough (just just) to qualify for FNB's Premier account so every time I start the App it spams me with adverts to sign up. Right at the moment it would just be R200/m for the privilege of having a shiny silver card. Would be nice if I could turn the ads off.

 

[supersunbird]

The annoying thing is that I earn enough (just just) to qualify for FNB's Premier account so every time I start the App it spams me with adverts to sign up. Right at the moment it would just be R200/m for the privilege of having a shiny silver card. Would be nice if I could turn the ads off.

Me too, wish I knew how to turn off the thing for the "have a premier card" as well.

 

[air]

https://en.m.wikipedia.org/wiki/Dunning–Kruger_effect

LOL, for a moment though he/she was a 'Swa' clone.

 

[Tomtomtom]

But you suggested earlier that given the tax on interest, one should keep money in the cheque account.

For anyone maxing out their tax free exemption, yes it does.

The only effect of tax is to proportionately reduce the opportunity cost. Perhaps you are comparing the R250+ interest foregone with a waived R420 fee and seeing a win; I'm comparing it to ~R50 and seeing a loss.

If you can reliably generate R1.5k/mo in eBucks with no effort or side-effect, that obviously changes the picture for you. But for me, and for most people I guess, a R250+/mo bank account isn't optimal. I suppose that's part of the reason why rewards programmes exist in the first place. They (initially) offset some of the high cost one wouldn't otherwise accept... but then the bank can (and does) change the rules over time to raise net fees by the back door. I'd expect that to do the opposite of generate loyalty, but then again, this is a business that trades on convincing people that the opportunity to buy more of their product is a privilege.

I only recently moved savings to the bank. Before then I kept that allocation in a money market fund and was a net debtor to the bank on average. Given the value of the interest-free period on the CC, the overall cost was maybe R5.