In July 2020 the Central Bank of Barbados released a list of the bank account fees and charges at the island’s commercial banks. When one looks at the bank fees in Barbados, they may not look too bad. But when you compare the low interest rates offered on these same accounts, you’re brought back to reality that they do indeed suck.
I’m grateful that the Central Bank decided to publish this list, because it gives us a chance to see how we can get away from the highest fees. The aim for anyone with a bank account in Barbados should be to see which commercial bank has the best products and services, lowest fees and worthy customer service. Admittedly, better rates are available at the credit union, however, there may be some reasons why people choose to keep their coins in the commercial banks. And if you’re one of those people, you will benefit from this exercise which compares commercial bank account fees in Barbados.
The Central Bank of Barbados
The Central Bank of Barbados aims to maintain a strong final structure through its role as bank regulator. The Bank Supervision department is a regulatory arm of the Central Bank that is tasked with maintaining bank order. All licensed institutions are subject to onsite and/ or offsite inspections by examiners and there are no exceptions. These inspections are rigorous exercises that assess the organisations’ corporate governance structure; and risks including liquidity, operational and finance. Inspections are not unusual events, because they fall in line with international banking supervision standards.
By releasing the extensive list of commercial bank fees, the bank hopes to “prevent a disincentive for savings that could cause financial exclusion of savers with minimal balances.” Although the list is not exhaustive, it is a great starting point where customers can see how the banks compare to each other.
Guidance For Banks
On the Central Bank’s website, there were guidance notes that banks are required to follow. Some of the ones that stood out for me were:
- “A bank may apply reasonable charges for withdrawals either at the ATM or over the counter, but such charges should not apply to both services”
- “No charge to customers for making account inquiries at their bank’s ATM”
- “The minimum balance on which interest is to be paid should not exceed $300.00”
Additionally, there were also some important requirements that banks must follow. Some of these have been points of contention in recent years, but now the Bank is seeking to ensure that customers are kept abreast of changes in their accounts. One of these is that commercial banks must notify customers of new charges by email at least 30 days before the effective date. Another is that all fee schedules should be easily accessible online. I tested this and there was only one bank where I could not find a clear link to its fees and charges.
Commercial Banks in Barbados
There are five (5) commercial banks in Barbados – Scotiabank, First Citizens, CIBC FCIB, Republic Bank and RBC. I have dealt with all of these banks in one form or another, so I believe that I can adequately compare them using various benchmarks. I do not have any favourites because I have had good and bad experiences at all of them, and as a result there are no biases in my corner.
Commercial Bank Account Fees and Charges in Barbados
Let’s see who has the best options (in terms of some of the fees and charges) for Barbadian customers. Click here to download a copy of the Central Bank’s publication. There are a few footnotes included which could alter how you assess these fees and charges. I’ve made a point to mention them if they would make a significant difference to the analyses below.
Minimum Savings Account Monthly Fees
Best: First Citizens – No monthly fee if the balance is over $300.00; $3.00 for in-branch withdrawals, if the balance is below $2,500.00
You will pay less fees on a savings account with First Citizens. Although there is a minimum balance required of $300.00 to benefit from no monthly fee, this is a good deal. If you go below the $300.00 minimum balance, the charge is $3.00. In comparison, at Scotiabank, if you go below the minimum balance the charge is $10.00. With the other banks, CIBC FCIB, Republic Bank and RBC, there is no minimum fee and they each charge a flat monthly fee on whatever you have in the account. CIBC FCIB charges $2.50, whilst Republic Bank and RBC each charge $5.00. In-branch transactions for withdrawals and deposits are premium services these days and, in most cases,, you will pay for at least one or both.
Minimum Chequing Account Monthly Fees: First Citizens
Best: First Citizens – No monthly fee if the account balance falls below $500. If the balance falls below a charge of $5.00 is applied.
Although Scotiabank’s chequing account is free with no minimum account balance required, First Citizens has the edge because they have free in-branch withdrawals and deposits. Scotia charges $5.00 for each of these transactions. Chequing accounts are tricky, especially if you do not reconcile your account to ensure that there are enough funds to cover cheques written. You will pay dearly for this mistake – First Citizens charges $40 for returned cheques. This is the best fee of the lot, with Scotiabank also charging $40; RBC is $50; and CIBC FCIB and Republic Bank are $60 each.
Senior Accounts Fees: Scotiabank
Best: Scotiabank – No monthly fee; 10 free in-branch transactions (withdrawals and deposits) per month, over 10 transactions attract a $5.00 fee; free point of sale transactions
Generally, all the banks have low or no rates for seniors. This is a very generous gesture that benefits retirees – no monthly fees and free withdrawals and deposits. Charges for point of sale transactions range from $0.25 for First Citizens to $1.50 if using an ABM card for CIBC FCIB. Special mention in this category goes to First Citizens because there is no monthly fee; there are free withdrawals and deposits and the charge for point of sale transactions is $0.25.
Youth Accounts Fees: RBC – No minimum opening balance, no monthly fee and free in-branch withdrawals and deposits.
Who is going to encourage young people to save money and not penalise them by charging crazy fees? RBC came through with the best deal for youth accounts. None of the other banks charge a monthly fee or a fee for deposits. However, to encourage saving and discourage spending, there is a charge for making withdrawals at Scotiabank ($5.00); CIBC FCIB ($1.00) and Republic Bank ($2.00).
First Citizens won this round with the lowest commercial bank account fees and charges in Barbados. Although many of the banks operate the same, the edge may come in factors not addressed here. Location and number of branches and ATM machines; customer service and after sales service; financial status; types of banking services (e.g. mobile, online banking, apps) and security features are all considerations that could sway customers from one bank to another.