Bank Accounts

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Compare and find best bank accounts

You might not pay much attention to the service that your bank account provides; as long as it holds your money, it’s probably all good, right? There are a number of factors you should take into consideration when both choosing your new account and assessing your current one. You can find out more about bank accounts and how they work, as well as how to compare between the best offers on the market right now, with this comprehensive guide.

How do bank accounts work?

A bank account, quite simply, is a transaction account taken out at a bank or other financial institution that houses your funds. It can receive deposits and be withdrawn from whenever you see fit, bringing with it the flexibility and freedom for you to decide what to do with your money and when. This will also likely be linked to a debit card, which is commonly provided by banks as part of the account package, while it can also be used for cheques, online usage and digital wallets to be used on your phone.

Bank accounts are utilised across Australia every day by millions of people thanks to their easy accessibility. With digital wallet linkage in particular, making use of your bank account funds has never been easier. These are generally designed for everyday usage and regular spending on things such as groceries, credit card payments, ATM withdrawals and other common expenses. Another key positive of bank accounts is their ability to be linked to other accounts such as savings accounts. If you’re low on funds in your bank account, for instance, you can easily receive a transfer from a savings account to top up your balance and continue to spend freely.

How do I compare bank accounts?

Fortunately, bank account owners are provided a wide range of options when it comes to comparison points between different bank accounts. It’s important to bear these factors in mind when the time comes to choose your bank account.

Types of bank accounts

There are bank accounts that can be applied to just about any circumstance. You’ll almost certainly find that you fit into one or more of the following:

Type of bank account Why it’s useful Where you could consider other options
Basic bank account
Grants you easy access to your funds whenever you may need them
Unlikely to be able to generate much or any interest
Student bank account
Monthly fees are typically waived, along with transaction limitations
International transaction and foreign ATM fees will apply to this account
Joint bank account
Joint expenses are easily managed and is good for couples that pool their income and pay their expenses together
Funds are more difficult to distribute if the joint bank account holders split

Business bank account

Separates business funds from personal ones and increases transfer limits
A business bank account is generally more expensive to maintain than others
Pensioner bank account
Can help reduce fees present in more standard bank accounts
Interest rates are likely to be lower, making growth more difficult
Overseas travel bank account
Can help you avoid foreign transaction or ATM withdrawal fees
An unfavourable exchange rate could cost you money if it drops while you’re overseas

Interest rates

Some bank accounts will come with higher interest rates than others, so it’s often in your best interests to lean towards those which can earn you more money. Alternatively, if you’ve linked a savings account to your bank account with the same financial institution, the interest earned in that account should be prioritised, as it generally has a higher return.

Account fees

With some accounts, you may find that you’ll be charged a monthly fee for keeping it running. Usually this will only be a fee of around $5 or less, but this can amount to $60 per year spent on fees alone. In most cases, this fee can be avoided by depositing a certain amount of money in your account each month as determined by your financial institution, often between $1,000 and $3,000.

However, there are also no-fee bank account options available if you want to reduce this cost to zero. These accounts may not be wholly fee-free, though, as some accounts will charge a small transaction fee for each purchase you make. While this may only amount to a few cents per transaction, this can add up over time. For more information on no-fee bank accounts, you can refer to our bank account comparison table to compare the best no-fee options on the market now.

Deposit requirements

Another factor to consider is how much you’ll have to deposit into your bank account. Many accounts will enforce a minimum deposit limit each month of anywhere between several hundred to several thousand dollars in order to have your fees waived, so if this could be a restriction for you it’d be wise to shop around for an account with lower limits. Without any deposits, you could be charged your monthly fees and then overdrawn fees on top of that, pushing your account into debt.

Ease of access

Accessibility is an important factor for bank accounts. What use are they if it’s difficult to gain access to them? You’ll almost always receive a debit card to make purchases or withdraw funds from your account, but it may be harder to come across ATMs or online banking services with some financial institutions. To combat this, though, smaller, more regional lenders will arrange with big banks, the Big Four of ANZ, Commonwealth Bank, NAB and Westpac in particular, to allow their members to access their ATMs without incurring a fee. Even slightly larger institutions like Bendigo Bank, for example, have arranged with the Big Four so that its members can withdraw from their ATMs free of charge. Check ahead of time which ATMs you’ll be able to access freely and prioritise those which will make your life simpler when dealing with your finances.

How are bank accounts different to savings accounts?

There are several key areas which distinguish standard, everyday bank accounts from savings accounts. Firstly, while bank accounts provide you with ready-made access to your funds at any time, savings accounts are designed to store your funds away and keep a gap between them and your day-to-day spending. Access is more limited as a result of this, so utilising funds from a savings account is usually made possible by transferring them into a bank account. Monthly restrictions on the number of times you’re able to withdraw or transfer will apply in some cases, however. Debit cards also can’t be linked to savings accounts, so you’ll only be able to use these with your bank account.

The main benefit of a savings account for a user is the interest that it can accrue over time. Savings accounts have a high interest rate compared to bank accounts, which is designed this way to facilitate handy financial growth over time due to less overall usage compared to bank accounts. You can even find high interest savings accounts for that very purpose. However, your qualification for the best interest rates may be contingent on several conditions. This can include the linking of your savings account to an everyday transaction account with the same institution, the number of purchases you make and/or the amount you deposit in your account each month.

Explained: the process behind opening your bank account

Top tips on the best features to look for on your bank account

Good interest rates

Although they won’t be as high as those of savings accounts, interest on bank accounts can reward your saving with an extra injection of funds.

Low-fee or fee-free accounts

These will be met with certain conditions, such as only coming with online bank accounts and not allowing for interest to be accrued, but paying little or nothing in fees can make a real difference.

Online access

These days, most financial institutions will offer apps or online banking features to their customers, but you should always double check to ensure you’re not missing out.

Branch and/or ATM accessibility

You might want to go for a bank account which not only holds enough physical locations for you to access but also allows you do utilise them freely.

No international transaction fees

This will come in handy particularly if you’re commonly travelling overseas, as some institutions will charge you exorbitant fees if you’re completing transactions abroad.

Lower minimum monthly deposit requirements

If you’re not sure about maintaining a monthly deposit flow with your bank account, look for one which has a lower minimum requirement.

Any other bank account questions?

Here are some of the most frequently asked questions about bank accounts by Australians

Is a debit card linked to my bank account better than a credit card?

These two cards serve different purposes. Debit cards are easy to obtain and help you limit your spending to within your financial means by drawing directly from your bank account. Credit cards, on the other hand, are essentially a short-term loan service that allows you to make purchases with your card provider’s funds and pay them back, potentially at a high interest rate. Ultimately, it’ll depend on the context of the purchase and your financial capacity.

Can I use my bank account to write cheques?

Yes – this is called a cheque or checking account and can be included as part of your bank account package with some institutions.

Will an overdraft facility help me withdraw more than I have in my bank account?

No overdraft facilities are able to be attached to your bank account, which allows account holders to apply to access funds up to a pre-determined limit (usually $2,000). From here, the process for approval is very similar to that of a credit card or other loans and if you’re approved, you’ll be able to access your desired funds without any overdrawn fees. In this way, you’re not withdrawing more than you have; you’re making use of approved loan funds. Your bank may allow you to overdraw without going through this process, however, provided the overdrawn amount is small ($200 or less) and your account is brought back to a positive balance within 24 hours.

Is a term deposit different to a bank account?

Yes – a term deposit is a single lump sum of money that you store in an account to accrue interest over a set period of months or years. You won’t be able to touch this money during your term without incurring a fee, and potentially without providing a month’s notice prior to doing so.

Should I choose a bank account with a high introductory interest offer?

If it fits your requirements, yes – but you shouldn’t wholly base your decision around introductory offers. These rates are likely to revert to much lower or non-existent interest after the initial period ends, so you must enter the decision process with eyes to the future.

Can I open my bank account online?

Absolutely – the process for doing so is more or less the same as in person, so check out your financial institution’s website to see how you can apply online today.

Should I take out a kids’ bank account for my child?

Yes – there are plenty of safe ways to store funds for your child and make them accessible for them to spend in responsible ways. Kids’ bank account providers will usually afford parents access and control over their son or daughter’s debit card usage in the form of spending restrictions or the ability to lock their card at will. They will also likely have access to bank statements to review how their child’s money is being spent