Ulster Bank is to introduce transaction charges for operating its current accounts, a move that is likely to see thousands of customers hit with higher costs.

It comes weeks after bailed-out bank Permanent TSB said it was changing the rules for those with its older current accounts, which would force many to pay fees.

Currently, Ulster Bank charges its current account customers a monthly maintenance fee of €4, but it has no transactions charges for the likes of ATM withdrawals or for paying with a debit card.

It now plans to reduce the monthly maintenance fee to €2, but will charge customers transactions fees for using the current account for their day-to-day banking.

The bank will impose a 20c charge for the likes of direct debit payments, point-of-sale transactions, and electronic payments into and out of the account using online, telephone and mobile banking.

ATM withdrawals will generate a fee of 35c, with 1c charged on contactless transactions and 80c for paper or staff-assisted transactions.

There will be an 80c charge for cheque transactions, in addition to the Government stamp duty of 50c.

Customers will be able to avoid the transaction charges if they keep a balance of €3,000 in their account.

But they will not be able to avoid the €2 a month maintenance fee, even if they have €3,000 in the account.

It had been possible to avoid monthly maintenance fee by keeping the account in credit up to now, but that will no longer be the case.

Customers over the age of 66 will be exempt from the maintenance fee and transactions charges, and youth, student and graduate accounts will not be affected by the changes.

The first charging period will come into effect in April, and the first fees will hit customer accounts in June.

A spokesperson for the bank said the changes made things more transparent for customers and brought the bank closer in line with the rest of the market, as other main banks already charged transaction fees.

Irish Independent