AIB is to stop offering free banking to customers with current account balances over €500.
Instead it plans to pay interest on phone and internet banking accounts of half a percent on balances up to €1000.
The measures will come into effect from the beginning of June. AIB says it is extending its commitment not to increase banking charges on personal current accounts until at least 2005.
AIB says the interest rate offering can reduce the cost of banking by 10%. However it says the average cost of banking is €52 per year, which would not be covered by the 5 euro in interest a customer with the maximum €1000 on deposit would receive in a year.
AIB says free banking will continue to be offered to customers over 60, and to students.
AIB's general manager of retail banking John Hickey said the moves would reduce the cost of banking for the majority of customers.
