Banking on the Post Office (Irish Independent)

04 November 2011

Consumers will now be able to do their banking at their local post office after Postbank unveiled a new current account.

Around 1,000 post offices will offer the new banking service by the end of the summer in a move that is set to put competitive pressure on the main banks.

Already people can save, invest and take out insurance through their post office, with plans to launch mortgages and credit card products next. The new product is expected to help rescue rural post offices.

Postbank, the joint venture between An Post and Benelux financial giant Fortis, said yesterday the new current account is now available in 270 post offices, but will be provided through 1,000 branches by the end of August.

The move is expected to put pressure on retail banks in the market. Just six banks offer current accounts -- AIB, Bank of Ireland, Ulster, Halifax, National Irish and Permanent TSB.

Current accounts are basic banking products allowing people to transfer money and arrange their personal finances.

Called the Everyday Account, the new Postbank service will offer free banking for those who remain in credit. There will be no quarterly fees, or charges for direct debit or standing order charges, John Donegan of Postbank said.

The overdraft rate will be 12pc, with an additional 6pc charged for "unauthorised overdrafts".

The Postbank overdraft rate is cheaper than that charged by AIB, Bank of Ireland, Permanent TSB, but not cheaper than Halifax, National Irish Bank and Ulster Bank.

Customers who sign up for the new Postbank current account will be issued with a Maestro debit card which will double as an ATM card. There will also be an option to bank online.

Mr Donegan said there are already 100,000 customers of Postbank which launched last year offering savings, investments and insurance products.

Now there are plans to integrate the existing An Post financial services operation, One Direct, into Postbank. The An Post electronic payments operation, Postpoint, will also become an integral part of Postbank, Mr Donegan said.

Postbank plans to offer personal loans and credit cards though post offices in the next few months, while the option of providing mortgages through post offices is also being strongly considered, Mr Donegan said.

The Postbank executive dismissed the suggestion that banking through a post office would only appeal to older people who collect their pensions in post offices. He said existing Postbank customers were, on average, in their mid-40s.

And the new banking service is expected to provide a lifeline for rural post offices.

The Postbank announcement came as postmasters announced plans to develop an alliance of major social organisations to jointly campaign for a national policy to protect the future of post offices.

The Irish Postmasters' Union (IPU) called for the Government to recognise the social value of post offices.

Union officials said the post office network was in a period of serious decline.

There are now 1,200 offices, following 500 closures in the past eight years.