Bailed-out bank Permanent TSB is changing the rules for those with its older current accounts, in a move that will mean thousands of them will end up paying fees.
The new terms and conditions will make it harder to qualify for fee-free banking.
Customers who do not qualify for free banking will have to pay €18 a quarter. This works out at €72 a year for using current accounts.
Changes will also see a reduction in interest paid for credit balances, and new overdraft fees.
The bank, in which the State has a 75pc holding, is imposing the changes on those who have legacy current accounts, and not to its flagship Explore Account which was introduced three years ago.
Explore Account has been the only current account the bank offers to new customers or to existing customers opening a new current account.
But large numbers of customers have remained in so-called legacy accounts, and the bank is now seeking to “standardise and simplify” how it operates these current accounts.
From the end of March people on the legacy accounts will have to pay the €18 quarterly fee unless they keep a balance of €2,500 in the account every day.
Up to now there have been various ways that customers were able to avoid the quarterly fee, such as keeping €1,000 in the account, having their salary paid into it, or having other savings or a mortgage with Permanent TSB.
The bank said there will be a new fee of €25 for setting up an overdraft facility or renewing one. Permanent is also cutting the interest rate it pays on credit balances in the accounts.
Currently the bank pays 0.25pc on balances up to €1,500, but the new rate will be just 0.01pc.
Two years ago Permanent TSB increased the charges on the legacy current account, pushing up the maintenance fee from €3.18 to €18.
A bank spokesperson said the changes will not affect customers over the age of 66, who will continue to benefit from free banking.
There has been a trend for banks to restrict free banking to those who meet strict criteria.
AIB customers have to maintain a credit balance of €2,500 to avoid fees, and Bank of Ireland requires a €3,000 balance.
Fintech competitors N26 and Revolut operate different models.
Revolut’s alternative banking services already appeals to more than 200,000 Irish users. It does not have a quarterly fee and does not impose a minimum balance. Instead, there is a 2pc charge on ATM withdrawals after the first €200 per month.
N26 does not require a minimum balance, and there is no administration fee. But a charge of €2 applies for using an ATM card more than five times in one month.
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