What is a chequing account? 2024 Guide to personal banking in S.A

Most South Africans have possessed a chequing account before, but what exactly is it? When taking out a bank account not much emphasis is put on explaining what exactly is a chequing account. Knowing what a chequing account is will liberate you from making mistaken judgements. Most importantly you will be able to differentiate between a savings account and a cheque account.

What is a Chequing account?

This question is crucial for anyone considering opening an account with a financial institution. It’s important to understand the advantages of having a checking account compared to other types of accounts. Checking accounts across various institutions generally offer similar functionalities, all rooted in the basic concept of a checking account.

A checking account is essentially a deposit account that allows you to deposit and withdraw money. It provides convenient access to your funds, allowing you to use them for daily transactions, both locally and internationally.

For your everyday financial needs, a checking account is indispensable, simplifying your banking experience. You can easily withdraw cash from ATMs, bank branches, or in-store registers, often with lower withdrawal fees.

Additionally, a checking account permits cash deposits from other banks, ATMs, or branches, making it simple for you or anyone else to add money to the account without prior arrangements with the bank.

How a Chequing account works

Through the advancement of technology, it is now easy to use a chequing account. A chequing account in its nature has few limitations when it comes to accessing available funds. Technology is making it easier today with the use of mobile apps and internet banking. You can do almost everything without having any limits and not visiting a bank.

Through mobile app and internet banking you can do the following with your chequing account:

  • Set your account daily limit.
  • Schedule debit orders.
  • Access current bank statements that have a bank stamp.
  • Send money to different banks and/or bank accounts.
  • Pay clients in real-time at a small additional cost.
  • Make withdrawals without having a card.
  • Buy prepaid
  • Send a payment request to a client and more.

Technology is making transactional banking very easy by incorporating all the above features. Most of which would need you to visit a branch to action. back when banking did no involve smart technology. So a chequing account now has many different uses because of technology.

Besides technology, here are the highlights of a chequing account:

  • You can make purchases and payments using your chequing account as long as you have enough money in your account.
  • Can increase and decrease spending limits at any time.
  • Chequing accounts usually charge way less interest or no interest at all.
  • Usually comes with an overdraft facility.
  • Comes with monthly fees. Monthly fees waiver is allowed for qualifying clients based on a number of requirements and depending on the institution.

Transactions that you can perform with a chequing account

Different transactions can be performed using a chequing account. Unlike other account types, a chequing account allows for flexible use of available funds. Here are some of the transactions that you can make using a cheque account.

  • Transfers – You can make transfers with institutions or individuals. This can be done multiple times with little or no restrictions.
  • One-time payments bill payment.
  • One – time payments – You can make one time payments using your chequing account. Today this is easy using the mobile app or internet banking.
  • Deposits – You can receive money from institutions or individuals or you can deposit money to your cheque account.
  • Withdrawals – you can make as many withdrawals as possible but they are subject to your withdrawal limit. Withdrawals come at a charge. You can make withdrawals at a till using your cheque card or at a branch or using ATMs.
  • Authorising debit orders- you can organize debit orders to pay rent, pay your home loan, insurance etc.

Common fees of a chequing account

A chequing account comes with a number of fees that are normally charged monthly but can be charged annually also. When taking out a chequing account you need to know these fees as they are important. Banks like FNB, Standard Bank and others offer different cheque accounts that have some or all of the fees we are about to list. A fee waiver is allowed in some cases, for instance, if you are an FNB private client you need to keep R100,000.00 a month for your monthly fees to be waived.

This table has a description of the fees that banks charge, description on the fee and an estimation figure of the fees.

Fee Description Estimated Amount
Monthly service fee This is an amount that a bank charges for holding a chequing account with them. The amount is unavoidable so it is deducted every month. R50 – Gold Card
R50 – R220 – Platinum Card
R200 – R500 – Black Card
Rates are only for fixed charges and not pay as you use accounts.
ATM withdrawals fee This is the sum of all the charges for ATM withdrawals. R0.50 – R2.50 per transaction – for own bank
R2 – R11 per transaction – on other bank ATM
Monthly statement fee This is a charge for sending your monthly bank statement. R0 – R2
Additional transaction fee This is a charge for chequing accounts that have a limit on the number of transactions that the account holder can make. R0.5 – R1.50 per transaction
Email money transfer fee When making a payment a bank will normally charge you for sending proof of payment by emailing the beneficiary the proof of payment. R0 – R1 per transaction
Insufficient funds fee Should you try to make a payment or schedule a debit order that becomes unsuccessful your bank will charge you for this. R8 – R150

There are more charges that banks charge, these may include balance enquiry fee, card replacement fee, international withdrawal fee and more. When taking out a chequing account you will need to familiarise yourself with these charges. You can find these charges on the bank’s pricing guide.

Conclusion

A chequing account plays an important role in banker’s day to day banking. Getting a chequing account will make your life easier as you will be able to transact whenever you want to. With the use of technology, you are able to do more than just transacting but also setting limits, scheduling debit orders and more.

Before taking out a chequing account, get to know what you will be getting and understand if it is right for you. There are plenty of chequing accounts to choose from and it comes with a number of benefits. Also, you can consider an overdraft option, however, don’t accept it if you don’t need it.