8 ways to reduce bank charges


When most people think of a bank and bank charges, they start swearing, thinking of all the times they have been fucked over. Especially if you have ever been swallowed in debt (or still am). The problem with banks is that we need them in our lives. All we can do is to use the tools we have to make the best of the situation. There are a few bank hacks that I use to do this and thought that you can benefit from it as well.

1) Save your salary in your home loan

Every month after receiving my salary, I pay every cent into my home loan. The reason I do this is because I want as much money as possible to earn interest. If I keep it in my transaction account it does not earn any interest. I know there are are some bank accounts where you do earn interest on transaction accounts. It will still be in the range of 4% compared to the 10.5% you will be earning in your home loan. If you have a horrible interest rate it can be even more.

The next thing that I do is to filter the money from my home loan back to the transaction account as I need it. Every week I try to estimate my expenses and transfer it. Granted, I have an overdraft at prime interest. This gives me some wiggling room in case I get my timing wrong. You might want to play it a bit safer to ensure all the debit orders go off without a glitch. May the best debit order win.

2) Optimise your home loan debit order

You have probably heard this one. You should request that your home loan mortgage go off as soon as possible after you have received your salary. The reason why this works is that you reduce the outstanding loan amount earlier. This reduces the amount the interest is levied on. At the end of your repayment period, it will save you approximately 2 to 3 monthly payments. It is not much but free money is free money.

3) Pay off your home loan earlier

While we are on the topic of home loans. Make sure to pay off your home loan earlier. If you can pay 20% more than your regular mortgage, you can reduce your repayment period by 7 years and two months. Yes, you read that correctly. Saving your emergency fund in your home loan is a brilliant idea.

4) Optimise your debit order dates

Well, this is not really optimising your debit orders as it is moving them as late as possible. Your monthly payment for things like insurance does not trigger interest as long as it is paid once a month. If you manage to keep the money as long as possible, you can keep it in an interest-bearing account for longer.

5) Combine bank accounts

Pooling you and your spouse’s bank accounts have advantages and disadvantages. If you use one account, you will save on banking costs. When you also pool your savings, you will probably get a better interest rate on your savings accounts. I compared the interest rates you can earn with different investment amounts in the article South Africa’s best savings interest rates.

Many high-interest accounts have minimum investment limits. It also helps with setting and keeping to a budget since everything is nicely centralised. On the downside, there is merit to each person having their own bank account. Having separate accounts builds trust and allows you the freedom to buy presents and personal items.

6) Reward programs

Reward programs allow you to earn points that can be spent on other everyday items. For instance, we pay almost all our electricity using e-bucks from First National Bank (FNB). All major banks have some form of reward program that can be utilised to save you some money. Just make sure that you are earning more than it is costing you to belong to the reward program. Then make sure to buy things that you would have bought anyway.

7) Ask for an interest decrease regularly

Most banks allow for an interest reduction on your home loan after a few years. On my home loan, I can apply every two years. My banker can expect a phone call every other September. Even if the answer is no 80% of the time, a small interest reduction will literally save you thousands. What is the worst that can happen if you simply ask?

8) Pay off short-term debt

This is not a money saving tip as it is a rule to live by. Avoid short term debt like the plague. It has ridiculous interest rates of double that of prime interest. This goes for credit cards, store cards and car loans. Try to do everything cash. If this is not possible, ask yourself if you really need to buy the item.

Banks are essential to our modern society. Especially in South Africa where carrying cash is simply not an option. The best we can do is to seize every opportunity to have this work in our favour. Using these eight tips, you can make sure that you make more money from the bank than your bank charges you.

Be safe out there,


Quote of the week

“A bank is a place that will lend you money if you can prove that you don't need it” – Bob Hope Click To Tweet


Thank you for reading to the end. Apparently, the average person spends 8 seconds on a page, so you are special. If you have any suggestions, feel free to drop me a mail on the contact page. If I missed anything or you have questions, don’t hesitate to comment below. I might even notice it and respond. If you enjoyed this article and really want to throw me a bone, please share it.

Lastly, if you want to be bombarded with emails known as the newsletter I send out once a month (if I remember), please subscribe on the right. There are also links to my Twitter and Facebook pages on the right (or at the bottom if you are browsing with a phone). All information is based on my opinion and you can read more about this in the legal disclaimer.


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  3. Namhla

    Thank you for a great article, I moved from a “more expensive” cheque account, back to their basic one. A great way a saved a few hundreds. Every cent counts.

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  4. Moneah

    Hi Hendrik,

    I would like to learn more about financial freedom and start implementing as from tomorrow. I will follow you on Twitter & will appreciate your weekly update emails as well.

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    Hendrik Brand

    Hey Moneah,

    Thank you for reading and following me. I decided to keep the mails to a monthly basis to keep it less spammy. You can sign up for the monthly newsletter which includes all the articles and I post each article on Twitter as I complete them.

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      Hendrik Brand

      Hey Siyabu,

      Traditionally you would save money in an account and then earn interest on that money, say 10%. So if you invested R10 000, you will have R11 000 after one year.

      When you save money in your home loan something similar happens. Let us assume that you still owe R20 000 on your home loan and the interest rate is 10%. After one year, you will owe R22 000. However, if you used your R10 000 to pay down half of your home loan, you would have only owed R10 000. So after one year (at 10% interest), you now owe R11 000, instead of the R22 000 you would have owed. So you are R11 000 better off. This difference is because of the R10 000 you paid down. So you saved yourself R1 000 in interest. This is similar to earning R1 000 interest in a savings account.

      I hope that clears it up.

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