PTSB restricts free banking for current account customers

Thousands of customers of Permanent TSB (PTSB) are set to face charges of up to €18 a quarter, or €72 a year on their current accounts as the bank makes it more difficult to qualify for free banking. Changes to PTSB's current account structures will also see a reduction in interest paid and new overdraft fees.

Since 2016, PTSB’s Explore Account has been the only current account it has offered to new customers or to existing customers opening a new current account. However, a significant number of customers have stayed in so-called legacy accounts, and the bank is now looking to “standardise and simplify” how it operates these current accounts.

Difficult

The change means that it will now be more difficult for customers of the bank to qualify for free banking from about the end of March, as they will then face a quarterly maintenance fee of €18 unless they maintain a balance of €2,500 in their account every day. Previously, such customers could avoid this €18 fee in a number of different ways, depending on their terms of their account. These included keeping €1,000 in their account, having their salary paid into it, or having other savings or a mortgage with PTSB.

After the switch, customers will also have to pay a €25 setup/renewal fee on an overdraft, a fee which they could previously avoid, while the bank has also slashed the rate of interest it pays on balances in the accounts. Previously, loyalty current account holders enjoyed interest of 0.25 per cent on balances of up to €1,500. Now however, despite having to keep more money on deposit to avoid bank charges, they will be paid less, with the rate of interest dropping to just 0.01 per cent.

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Previous increase

PTSB previously increased the charges applicable to these current account holders in 2017, when it raised the maintenance fee from €3.18 a quarter to €18. A spokesman for the bank said the latest move will not affect customers over the age of 66, who will continue to benefit from free banking with PTSB.

The restriction on free banking from PTSB comes as competition intensifies in the current account market. While most of the incumbents, such as AIB and Bank of Ireland, also impose minimum account balances for free banking – €2,500 for the former and €3,000 for the latter – new arrivals, such as international fintech players, N26 and Revolut, operate a significantly different model.

N26 doesn’t require a minimum balance, and doesn’t charge any administration fee, although a charge does apply when you use your ATM card more than five times in one month. It has been heavily advertising in the Republic, looking to capture a growing share of the youth market, while Revolut, which it says has about 150,000 Irish customers, also doesn’t have a quarterly fee and doesn’t impose a minimum balance. It does however have a 2 per cent charge on ATM withdrawals (after the first €200).