Current account costs| A Guide to Loans
The choice of your current account must be weighed very carefully, because even if everyone says it is easy to open a new one, especially online, we know that the choice is first and foremost a very difficult and instinctive issue for the consequences it could have.
Imagine we are wrong to open the current account and to realize it only after a few months that we have begun to carry out operations either active, for example with the crediting of a salary, or passive, perhaps charging the bills of the domestic utilities.
Check the costs of a current account
The point is simple: our savings must be managed by a bank able to respond to our needs, always! But today it is difficult to really understand what the costs are , even if they are obviously justified by the services that the bank offers us.
The expenses that a current account has are a fundamental variable in the choice and must always be evaluated very carefully.
The cost of a current account consists of two components, one fixed and one variable
In particular on the fixed costs and the variable costs of a current account , we can say that each account has expenses that are fixed regardless of how much we use it or not, and of the other expenses or costs that are variable and not determined when we open the account.
For example : fixed costs, typically those that must be incurred to open the account itself or to keep it alive, the latter (variables) are those whose amount depends on the number or type of transactions we carry out. Then there are additional costs for the assignment received, a real loan that the bank provides us with, the so-called bank credit that generates debit interests that are debited to the current account. Obviously the credit is not mandatory but a possible current account overdraft is much more expensive even if more flexible.
To better clarify which are the main cost items that we can find in our year-end statement we list some of these:
- Fixed or flat rate fee for keeping the current account : if the account has a fixed flat rate, this is debited monthly, quarterly or half-yearly (accounts with “deductible”), not often even in a single annual settlement; with a fee-based solution the bank offers a certain cost, or in some cases an unlimited number of transactions included in a single price set when the current account is opened (accounts “without deductible”). This is an operation that we find very useful if we plan to use the bank account a lot by carrying out a large number of transactions: in this way it will already be established how much the management of the account will cost, without any surprise at the end of the month.
Alternatively, for those with limited financial needs, we want to recommend BASIC ACCOUNTS , which are current accounts that have very low or even completely free fees , offering a limited number of transactions included and pre-established services, such as salary credit or of the pension and the debit card are usually always included, a credit card is instead paid separately.
Current accounts that have a fixed fee
- Stamp duty : a tax that is due only for the fact of having opened a current account with a bank in force, a tax in force since 2012 in Italy.
At the time of writing, the size of the stamp duty is synthetically:
- € 34.20 for natural persons who do not have a stock exceeding € 5,000 in one year;
- € 100.00 for subjects other than individuals.
The tax is applied at the time of issuing the account statement or statement and relates to the reported period even in the event of opening and closing during the year.
- Commissions or Service charges : typically those calculated for carrying out banking transactions. Basically they are the costs for making a bank transfer, a withdrawal with a credit card or debit card, a bill payment address, the issue of a check, the withdrawal from an ATM not of one’s own banking network, just to give a few examples. Obviously this type of expenses vary a lot depending on the bank chosen and even in some cases they can be free or included in the fee that the bank requires. On this item we suggest to pay particular attention.
- ATM card or debit card: in some cases the banks ask to be paid for the supply of this instrument, even if in many cases it is granted free of charge.
- Production costs of the bank statement : while its digital version can always be consulted free of charge through home banking tools, its paper version has a cost that varies from bank to bank; it can be delivered monthly, or every three or six months, or even just once a year.
- Expenses for sending in paper form of communications from the bank: as for the account statement fees, all communications that the bank sends by post may have a cost that is always charged to the customer.
- Expenses for the maximum overdraft or in any case charges in the event of a current account overdraft : the interest that the bank applies if the loan is used (for example in the event of an overdraft). It can often be quite high: usually, the payment takes place in the quarter following the one in which it went red.
- Periodic interest settlement expenses : at the end of the calendar year or a specific intermediate period, usually every quarter, interest and expenses are calculated; these will then be attributed to the customer.
- Expenses or commissions for the provision of funds : a comprehensive commission applied for the provision of funds by the bank. It is applied to entrusted relationships regardless of the actual use of the credit line and cannot exceed 0.50% of the amount agreed by the bank as a current account credit line for the quarter.
Costs for current accounts
Before choosing a bank account and opening it, it is important to inquire about all the associated costs, such as any debit and credit card fees, commissions to perform operations on the account, interest, periodic settlement expenses and any other type of burden, to be able to evaluate them according to your needs (also with the help of the multiple tools made available on the Internet) as well as in the information sheets that the banks must necessarily provide when opening a current account.
Finally, we remind you that in Italy who has an ISEE (indicator of the equivalent economic situation) of less than 8,000 euros must have no expense and is also exempt from stamp duty.
The important thing is not to stop asking questions.