Digital banks compared — Bank Zero beats TymeBank and Discovery Bank

Bank Zero is the cheapest digital bank available to South African customers, with Discovery Bank being the most expensive, a MyBroadband analysis has revealed.

We compared fees for three prominent digital banks in the country, including TymeBank, Bank Zero, and Discovery Bank, to determine which is the cheapest.

Using a hypothetical basket of monthly transactions, we calculated the total cost for each bank to determine a winner. The basket includes the following transactions:

• The monthly account fee
• One cash deposit of R1,000
• Two PoS cash withdrawals of R1,000
• Two external debit orders
• Three payments
• Two prepaid airtime purchases
• Two prepaid electricity purchases
• 15 SMS notifications

Bank Zero is the cheapest by R6.50, with the basket of fees working out to R23.95. TymeBank — the runner-up — charges R30.45 for the bundle of transactions. The results of the comparison are provided in the chart below.

Bank Zero’s lower withdrawal and transaction notifications fees are what set it apart from TymeBank. It charges R2.00 per withdrawal, while transaction notifications are free of charge.

On the other hand, TymeBank charges R3.00 per withdrawal and R0.30 per SMS notification.

Discovery Bank came in last, with its charges for the basket being R35.00 more than Bank Zero. The most significant contributor to the gap is Discovery Bank’s monthly account fee for the Gold pay-as-you-go transaction account.

It charges R20.00 monthly as a management fee, while TymeBank and Bank Zero’s accounts are free of monthly fees.

While Discovery Bank is the most expensive — and by some margin with a total cost of R58.95 — it offers several benefits that aren’t available through other banks.

For instance, a monthly Vitality Money premium is included in the R20.00 monthly account fee.

Vitality Money offers customers dynamic interest rates, discounts, and Discovery Miles rewards.

As one’s Vitality Money status improves, they can lower their personalised borrowing rate by up to 6.75%, get up to 6.6% interest on their savings, and up to 5% on the money in their everyday accounts.

Regarding discounts, Discovery Vitality Money customers can receive up to 75% off on local and international flights, up to 20% off fuel at Shell and BP, and up to 75% off on healthy groceries from Woolworths and Pick n Pay.

Customers also earn Discovery Miles on their spending, which can be used at the Vitality Mall, on travel, or exchanged for cash.

TymeBank offers even more attractive interest rates — up to 10% per annum — through its GoalSave product.

Account holders earn 4% interest on savings from day one, 5% after 30 days, and 6% from 90 days onwards.

Moreover, TymeBank customers can earn 7% interest if they give ten days’ notice before withdrawing funds.

The interest rate is further increased if your salary or other regular monthly income gets paid into your TymeBank account.

If you give ten days’ notice before withdrawing funds, TymeBank offers an “income kicker” that brings the effective interest rate up to 10%.

Bank Zero offers interest rates ranging from 6.45% to 8%, depending on the account balance and account type.

It also provides customers with a debit order approval system, allowing you to review every debit order in the bank’s app before it is activated on the account.

A notable trend among the three digital banks is that none of them charge fees for prepaid airtime or electricity purchases through their platforms.

The banking fees for entry-level accounts from TymeBank, Bank Zero, and Discovery Bank are compared in the tables below.

Now read: South Africa’s “neobanks”

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Digital banks compared — Bank Zero beats TymeBank and Discovery Bank