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Bank Accounts with Sub-Accounts

Find out with Savvy how a bank account with multiple sub-accounts could help you organise your personal banking.

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, updated on July 31st, 2023       

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More about bank sub-accounts

Having a bank account with multiple sub-accounts can help you reach savings goals, manage your spending and make tax time a breeze.  Find out what they are and how to use them effectively to help you organise your finances with Savvy.  Compare accounts from around Australia here to help you find one which best fits your banking needs.

What are sub-accounts and how do they work?

Sub-accounts are divisions within a bank account, a bit like individual drawers in a filing cabinet. They allow you to divide your money up into separate accounts, each with a different name, to assist you in organising your finances and keeping track of your spending.  Accounts which allow them are often referred to as split accounts.

However, you only have one bank account number and only pay one set of account fees (if any are charged).  How many sub-accounts you’re permitted to have will depend on which financial institution you choose, but the average is between eight and 12. 

In Australia, there are accounts which allow sub-accounts for savings, everyday accounts and business accounts, so whatever type of account you’re looking for, you should be able to find one which allows for account splitting.  Savvy can help you decide which split account is best for you by presenting you with simple comparison information.  Use this information to compare accounts and find the best one for your personal needs.

How can I use sub-accounts to organise my finances?

Sub-accounts can be extremely useful within savings accounts, transaction accounts and small business accounts.  Here are some suggestions to get you started when determining how to use and compare them:

Sub-accounts in savings accounts

  • name a sub-account after each one of your children and allocate a monthly allowance to each child. Use this account when you buy items specifically for one child, so you ensure you’re spending the same on each of your children
  • name one account for each savings goal you have and divide your monthly savings according to a pre-defined list you’ve budgeted for. For example, you may have accounts called ‘new car’, ‘overseas holiday’ and ‘Christmas gifts’. You may decide to put aside $100 a month towards saving up for a new car, $80 a month towards your holiday and $50 a month for Christmas presents. In this way, you can watch your savings for each item grow, which will give you more incentive to save towards specific goals.
  • you could name one sub-account ‘emergency fund’ and put a set amount in this portion to remain untouched unless there’s an emergency. For example, if you have elderly parents or relatives overseas or interstate, you could leave $5,000 in your emergency fund in case you ever need to fly to their aide at short notice in the event of accident, illness or death. If you vow not to touch your emergency fund, you’ll have peace of mind knowing that if anything did happen to a member of your family, you’d have the funds to be with them in their time of need.

Sub-accounts in transaction accounts

  • use differently named accounts to keep track of your spending in different areas. For example, you could have one sub-account called ‘utility bills’ and set up direct debits to pay your gas, electricity, phone and internet bills from this one sub-account so you’re aware of how much you’re spending on basic utilities.
  • name one sub-account ‘rent’ or ‘mortgage’ and ensure that as soon as you’re paid, you transfer sufficient funds into this sub-account to pay your rent or mortgage so payments are never missed.
  • name one account for each leisure area of interest or hobby you have and allocate yourself a set amount you’re permitted to spend per month on your hobby. For example, you could have one sub-account called ‘eating out’ and another called ‘football’. Once you’ve spent that set amount, there's no more until the next month’s allocation comes around.  This can help reduce impulsive spending and help you understand how much you’re spending on leisure interests in your life.
  • if you have an investment property, nominate one sub-account and pay any expenses for repairs or maintenance of the property out of this account. This will make tax time more of a breeze, as you’ll be able to tell your accountant exactly how much you’ve spent on your investment property at a glance.

Using sub-accounts within a business account

There's many ways that sub-accounts can assist you and your accountant to keep track of your business finance, for example:

  • name one sub-account after each major client you may have, so you can see at a glance if you’ve been paid by that client
  • name one after each division of your company, so you’re able to compare the performance of each division
  • name one after each product you offer, so you’re able to separate expenses for each product line
  • name them after each branch or shop in your business, so you’re quickly able to see which shop is most profitable when you compare deposits from each location

Types of bank account

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Here’s more information about bank accounts with sub-accounts

Do banks charge more to have sub-accounts?

No – banks don’t charge more to allow you to have sub-accounts, although not all accounts can be split in this way: only specially designated accounts that advertise them as a main feature.  Some of these accounts have no account-keeping fees and no fees for transactions, so you’re effectively getting multiple accounts for free. When you make a payment from the account, you’ll have to specify which sub-account the money is paid out of.

How do I choose names for my sub-accounts?

Banks specify how many letters you’re able to use to name your sub-accounts, ranging from 9 to 20 characters.  Choose short names which you’ll easily remember and immediately know the purpose of.  Remember that longer names may be hard to read or may be cut off or shortened on smartwatches or mobile devices, so keep your naming system short and sharp.

Can I transfer money between my sub-accounts?

Yes – you’ll be able to transfer money between your sub-accounts when you go online onto your banking app.  Just choose the option that says ‘transfer between my accounts’ and all of their names should be visible to select. 

Can I make payments from any of my sub-accounts?

Yes – when you use internet banking to make payments, you should be able to specify from which account the money is to be taken. Note that ATM access is not usually available for split accounts, but you should be able to withdraw funds in a bank branch if you require cash out.  Split accounts usually can’t be linked to a credit or debit card either, so you’re limited to making payments by phone banking or internet banking. 

Do my sub-accounts earn interest?

Yes – you can get savings accounts with sub-accounts which also earn interest.  If there is a minimum deposit requirement to earn bonus interest, the amount you deposit into each of your sub-accounts is considered as a lump sum together.  For example, if you’re required to deposit $1,000 minimum monthly to earn bonus interest, you could put $600 into your car fund, $200 into your holiday fund and $200 into your Christmas present fund, and you’ll be credited with depositing $1,000 altogether, even though it’s divided up into separate sub-accounts.

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