Outward payment fees
When opening an account, you should read carefully any information regarding the bank’s fees and tariffs, sometimes presented in the form of a detailed chart. This chart contains a number of criteria which influence the cost of a bank transfer.
1) The location of the recipient’s bank: the closer it is, the cheaper the transfer will be. Below are the different options listed according to their increase in cost:
- transfers up to Euro 50,000 according to SEPA standards (EUR transactions within the EU/EEA region, IBAN (International Bank Account Number) of the beneficiary, BIC (Bank Identifier Code) of the beneficiary bank, “Shared charges” (SHA) option); these transfers will cost up to Euro 10.
- transfers within the EU not using SEPA standards;
- international transfers: from Euro 3,5 to 20
2) The participation of a correspondent bank in the fund transfer. The correspondent bank may charge the same commission as the recipient bank or often even more. Clients do not know the amount of commission or whether a correspondent bank will take part in the transaction, but in either case it is the client who pays.
3) The currency of the transaction. If your payment order is made in a currency other than the currency of the account, the bank will perform currency exchange at its internal rate when executing the transfer and it may charge you more for the transaction. Transfer of funds in ‘unpopular’ currencies will be more expensive than the transfer of Euros and may be up to Euro 100.
4) The urgency of the transaction. The majority of banks offer same day transfers (on condition that a payment order is placed with the bank before the banking day is over, that is, before 1pm). This service will cost 2 to 3 times more than the price of a usual transfer. Its cost may also depend on the sum transferred and amount to up to Euro 150.
5) The order transmission method. If you refer your payment order to the bank by fax, by phone, or in person it will be Euro 25-35 more expensive than sending a payment order via Internet banking.
- interbank transfers between the accounts of the same client: these are free in all banks (if currency conversion is required, you will be charged for the conversion, of course).
- interbank transfers between the accounts of different clients: these are usually charged at a rate from Euro 1 to 15 or may be free of charge.
6) The amount of the transfer. The cost of transfer may be charged in proportion to the amount of transfer, within predetermined minimum and maximum limits. A well-known Austrian bank charges a fee of 0.25% of the transfer amount, but not less than EUR 50 or more than EUR 500. The fee may be fixed (a flat fee). Sometimes you may negotiate a fee discount with the bank before you start to work with your account.
7) Confirmation of transfer. Providing official confirmation of a transfer (SWIFT) will usually cost from EUR 2 to 15.
8>) Processing standing orders (instructions to the bank to pay a set amount at regular intervals to another account) and direct debit (instructions to the bank to collect an amount directly from another account, amounts may vary). You should bear in mind that the bank may charge you once, when such an order is placed, or it may charge you for every transaction under such orders.
9) Correct details on your order. If an IBAN or BIC is not provided, you will need to add an additional commission of 5 Euros or more. Amending or revoking an order will cost Euro 35 to 80.
Sometimes it may be necessary to perform a ‘search’ for a payment made. The older the payment is, the more expensive the procedure will be (Euro 35-95 + fees from banks abroad).
Thus, if you pay all the fees and charges on your own, the cost of a bank transfer may amount to Euro 20 – 40. You may save some of the fees by using Internet banking or choosing an option where the commission is paid by the beneficiary.
Inward payment fees
Inward payments are frequently processed for free, but, when looking at banking tariffs you should be aware of possible exceptions. For example, if you have a business account, a fee may be charged on every transfer (as in one of the Scandinavian banks, where they charge Euro 4 per transaction). If you have a savings account, the bank may put a limit on the annual number of transactions processed for free (a large bank in Switzerland, for instance, sets this limit at 5000).
If the currency of an inward payment differs from that of the account, the bank may withheld the conversion fee along with the payment processing fee (in Cyprus banks they will charge you 0.2% or a maximum of Euro 500)
The sum of a commission may vary depending on the amount of a transaction (e.g., in Cyprus banks there may be no commission (for transfers up to Euro 2000) or a commission up to Euro 20 for a transfer exceeding Euro 50,000). Incorrect details shown by the sender, which require manual processing by bank officers, will increase the amount of the commission to Euro 25.
Account servicing charges
The amounts you spend on account servicing derive from the services pack, as some banks render particular services for free, while others charge you for the same services.
Let us consider the connection to Internet banking, which is now by far the most convenient way to manage your account on a day-to-day basis and save your bank transaction charges. Internet banking may be provided for free or for a fee. The latter means a one time payment of Euro 40-50; if the Internet connection to the account is provided for free, you may have to pay for the encoding device.
Besides this, there are also monthly subscription fees for the connection to Internet banking, which may start at Euro 8-10, although some banks do not charge this fee.
You may have to pay up to Euro 90 for the issuance or replacement of pin codes, coding cards, test key codes, and, possibly, a monthly account servicing fee, which is not usually much – approximately Euro 3-5. The servicing fee may be charged on an annual basis as well. Swiss banks set the annual fee at CHF 400.
Account statements at the end of the period stipulated by the bank are usually provided for free, though it should be kept in mind that you will have to pay for a bank to send out or store statements.
Banks usually charge you for fax and phone communications and for issuance of a bank reference on request etc.
Some investment banks offer their clients approved comprehensive tariffs, which comprise several types of services (not rated separately), as a kind of bankers’ ‘all-inclusive’. A comprehensive rate is adjusted according to the amount deposited on the account and may vary from 2-3% to 0.5%.