Change Bank Accounts

A look at how to change bank accounts to switch to one with better terms and more features - by comparing your options with Savvy.

Last updated on May 2nd, 2022 at 05:32 pm by Cate Cook

How to switch bank accounts

You may have outgrown your childhood bank account, need to switch banks or just want to investigate which new options are available. Whatever your reason for wanting to change accounts, Savvy can help you compare different offers until you find one which suits your needs perfectly.  Take a detailed look at how to change bank accounts and what features to look for here.

What steps are involved in changing my bank account?

Step 1:  Research

The first step you’ll need to take once you’ve decided to change your account is to research the options available to you.  Think about the reasons why you feel you want to switch accounts and what additional functionality you’d like from your new bank account.  Form a clear idea in your head about what you hope to achieve by switching and what it is exactly you’re looking for.

Step 2:  Compare offers in the market

When you’re clear about what your future needs are, let Savvy help you narrow down your choice by comparing various bank accounts to see which one is the closest fit to your individual needs.  Compare fees for different accounts and work out how they may be applied to you.  For example, if you frequently withdraw cash, look for an account that has no ATM fees and allows you to use them across Australia at no charge.  If it’s a savings account you’re after, compare interest rates to find one which offers the highest interest possible.

Step 3:  Open your new account

Once you’ve found a new account which is a great match for your banking needs, you can open it.  If you’re opening an account with a bank, building society or credit union which you haven’t used before, you’ll need to supply 100 points of ID.  This could be your passport and driver’s licence, for example, or any other form of ID which includes a photo and your signature.  Most financial institutions allow you to open an account online, a simple process which should only take around five minutes.  Deposit sufficient funds into your new account to cover any automatic payments which you’ll set up for the following week.

Step 4:  Transfer all your direct debits and auto payments

Next, compile a list of all the automatic payments you may have set up which come out of your account without you having to think about them.  Depending on which bank you use, you may be able to access a list of all your direct debits and auto payments through your banking software.   Use past bank statements from your old account to ensure you don’t forget any vital payments when you transfer your details.  Don’t forget annual subscriptions like computer software or virus protection and make sure all your utility bills are covered too.  Go online to each company you pay and change the account details for your direct debits and automatic renewals. 

Step 5:  Close your old account

Once you’ve updated your details with all your suppliers (and perhaps your employer), it’s worth waiting at least a month to ensure that you haven’t forgotten any subscriptions or payments.  When you’re satisfied that you have successfully transferred your auto payments, go back online and transfer all the remaining funds from your old account to your new one  – and then close your old account.

Why do people change bank accounts?

There are many reasons why people might want to change accounts.  These may include:

  • you aren’t satisfied with the transaction features available with your everyday account and want more features such as predictive budgeting
  • you’ve seen adverts about other savings accounts offering a higher interest rate than you’re currently receiving
  • you want to reduce the fees you’re being charged on your current account
  • friends have told you about great new features they’re enjoying with their new transaction accounts
  • your mortgage broker has advised you to apply to another bank for your home loan, so you want to open new accounts with that bank so they view you as an existing customer

What features should I compare when I’m looking to change my bank account?

For transaction accounts

  • check out the fees that may apply to the account, such as monthly costs, those charged for using ATMs overseas or if your account becomes overdrawn
  • read the terms and conditions so you’re aware of any restrictions or limits which may apply to the account, such as a minimum account balance required, or a limit on the number of transactions allowed per month
  • if you’re a pensioner, a student or a teenager, is fee-free banking available?
  • look at the functions offered, such as BPAY, EFTPOS and QR code payments, and make sure you’ll be able to do everything you need with your banking
  • think about whether you want advanced features like rounding up (so each transaction you make is rounded to the nearest dollar and the remainder automatically transferred to a savings account) or account sweeping (where funds are automatically transferred to your savings account when a certain limit is reached)
  • if you use ATMs, are there fees attached to those which belong to other networks or is all ATM use fee-free?
  • if you run a small business, do you need compatibility between your account and accounting or budgeting software for the best business bank accounts available to you?
  • does the bank have a mobile app which is compatible with your phone and smart watch?
  • will you be able to link your new account with other existing accounts which you want to keep, such as your credit card, other savings or transaction accounts or possibly your mortgage offset account?

For savings accounts:

  • is the interest rate being offered competitive?
  • are the account fees low or are no-fee options available?
  • is there a way to earn bonus interest, and if so, what are the conditions for accessing it and can you fulfil those requirements? For example, some accounts require you to make a minimum deposit each month to receive the bonus interest or to maintain a minimum account balance
  • is the supplied online banking app easy and simple to use?
  • do you feel confident the bank’s customer service will assist you if you need help?

Can I have more than one everyday transaction account?

Yes – you can have multiple transaction accounts if you wish, although the additional fees you may have to pay could make it expensive to do so.  How many bank accounts you have is a personal decision, of course.  Some people do like to separate different aspects of their life, such as having one joint everyday account with their partner or spouse, and another one which is a personal account.

Recent innovations in banking have produced new ways of managing your personal finances.  For example, instead of having multiple transaction accounts, some online bank accounts now allow you to split your account into separate parts and allocate a portion of your income to each part.  Other banks allow you to set up multiple sub-accounts under your main savings account.  For example, you could have a sub-account called ‘holiday’, another called ‘new car’ and so on, allocating a portion of your savings to each goal so you can watch them turn into reality.

More frequently asked questions about changing bank accounts

Should I keep my transaction and savings accounts with the same bank?

It can make life easier to have your savings and your transaction accounts with the same financial institution, especially if you wish to set up automatic transfers between your everyday account and your savings account.  However, it’s always worth comparing different offers to ensure both accounts suit their intended purpose.

Are building societies and credit unions as safe as banks?

Yes – in Australia, credit unions, building societies and online banks are all regulated by the same authority: the Australian Prudential Regulation Authority (APRA).  This is an independent authority that supervises financial institutions across banking, insurance and superannuation.  All authorised deposit-taking institutions (known as ADIs) are backed by the Australian government’s financial savings guarantee, which guarantees up to $250,000 per person per institution in the unlikely event that it should crash in a financial crisis.

Can I have more than one debit card linked to my new account?

This will depend on which bank or financial institution you choose to bank with.  Some banks have a limit of one linked card per account, whilst others allow multiple debit cards, although there may be additional fees for extra linked cards. Compare these extra fees with Savvy to make sure you’re getting the best deal possible if you need to have an additional card. 

If I change my account to a new bank, can that help me get a home loan?

Banks and other lenders can look more favourably on existing customers, particularly if you’ve been a customer for a long time.  For this reason, it can sometimes be worthwhile thinking in advance and opening an account with a bank you may wish to approach in the future for a loan.  However, other factors such as your income, expenses and how much you wish to borrow will have a much greater influence on whether you get approved for a loan and the terms you’re approved for, so changing accounts may not be worthwhile just for this single reason.