A wave of fee increases is coming at domestic banks

By: Trademagazin Date: 2024. 11. 04. 10:54

Significant fee increases are expected at Hungarian banks from January 2025, after the stop on fee increases previously introduced by the government expires. OTP Bank has already announced the new, higher rates, which may almost double for certain items. Experts warn that other banks may follow OTP’s example, and we can expect another wave of fee increases in the spring of this year.

The issue of transaction tax and pass-through

Banks have been paying transaction fees for more than a decade, but they are often passed on to customers, especially corporate customers, but also to a lesser extent retail customers. In the summer of 2024, the government announced that the amount of the transaction fee would increase: the general fee increased from 0.3% to 0.45%, and the maximum amount increased from HUF 10,000 to HUF 20,000. In the case of cash withdrawals, the fee increased from 0.6% to 0.9%. However, until the end of 2024, the government prohibited banks from passing this burden on to retail customers, thus helping to stimulate consumption and economic growth.

Details of the January fee increase

In January 2025, however, the rate hike stop will end, and based on OTP Bank’s actions, a serious rise in prices is expected. According to the new tariff, for example, the cost of transfers within the bank will increase from 0.3% to 0.45%, while the fee for transfers outside the bank will increase from 0.35% to 0.5%. The maximum fee of HUF 14,522 can increase to HUF 25,000 for a non-bank transfer.

This fee increase will be felt especially in the case of larger transfers over HUF 5 million.

More expensive cash withdrawals at home and abroad

Those who choose cash withdrawals cannot avoid the increase in costs either. The fee for withdrawing cash from OTP’s own ATMs will increase from HUF 159 plus 1.49% to HUF 159 plus 1.79%. At ATMs of other banks, the fee increases from HUF 1,581 plus 0.6% to HUF 1,581 plus 0.9%. Withdrawing cash from EU ATMs abroad also becomes more expensive: it rises to HUF 1,581 plus 0.9%, while for other currencies the cost increases to EUR 7.36 plus 2.12%.

Another wave of fee increases in the spring

According to experts, banks do not only raise fees at the beginning of the year. Legal regulations allow banks to increase their fees by the previous year’s rate of inflation, which could mean an additional 4% price increase in the spring. This means customers could face up to two rate increases in 2025, which will also affect costs such as account management fees.