The type of bank account which will be perfect for you will depend on what you’re looking for and what your banking needs are. Are you a youth or teen looking to open your first transaction or everyday account in Australia, or an aged pensioner wanting the best interest rate for their savings? Are you looking for an account for your spending or your saving? Compare the basic types of bank accounts available in Australia to help you choose which is best for your needs.
This is the main bank account you’ll use for your everyday banking needs: depositing your income and using those funds for shopping, paying for drinks and meals, buying items online and paying bills. You’ll probably have your credit or debit card linked to this account and be able to access your account either online, on your phone or smart watch. You may wish to set up a digital wallet so you don’t have to carry around a wallet full of cards.
This is where you’ll keep your savings to earn interest for you, so the interest rate offered is a primary consideration. Fees charged are also worth comparing, as are many terms and conditions which may apply to receive any bonus incentives or special introductory offers. Comparing savings accounts with Savvy is easy, as you’re given simple-to-understand interest and fee information in a format that makes it easy to compare.
These are the two basic types of bank accounts: one for spending, one for saving needs. However, the banking institutions have also developed banking products for other specific needs. Some of these are:
Children’s bank accounts are designed as joint accounts for parents and kids aged from infancy to 12 years old. They feature fee-free banking, strong parental controls and often fun, colourful graphics to teach children about the basics of banking and saving their pocket money. A child can open an account in their sole name from the age of 12 and can be issued with a debit card with their parent’s permission from this age. Youth accounts tend to be for teens and young people from the age of 12 or 14 upwards until early adulthood, with some available until the accountholder is aged 21 or even 25.
Many banks and financial institutions offer students fee-free banking as long as they’re studying, aged over 18 and under 30 years of age. If you’re a student, it’s well worth looking at special deals for students to save you money.
Aged pensioners can also bank fee-free with many specially-designed transaction and savings accounts. An account that has your pension or super allowance paid into it automatically can earn you bonus interest on your savings.
This is a special type of account which is linked to your home loan, designed to save you money on the interest you pay on your loan. The money in your offset account reduces the interest you pay on your home loan on a dollar-for-dollar basis. For example, if you have $100,000 left to pay on your mortgage but you have $10,000 in your offset account, you’ll only pay interest on $90,000 of your loan.
As their name suggests, these are transaction accounts designed to be used by a business. They are geared for multiple transactions, often with no account-keeping fees and unlimited standard electronic transactions. The best business accounts often allow both Osko and PayID instant payments, while many feature frequent and detailed bank statements to allow for accurate business accounting.
Also known as global accounts, these offer the ability to send and receive money to overseas accounts with reduced or no fees, and to receive money from overseas in different currencies. They’re popular with workers who frequently work overseas or who receive part of their income in an alternative currency.
These are savings accounts which hold a set sum of money for an agreed period. In return for leaving your money with the bank for a set period, effectively locking it up, higher interest rates are offered. Term deposits are available for anywhere between one month and five years.
First of all, choose which type of account you want: either an everyday account for your daily transactions or a savings account. From there, it’s crucial to delve into the key features and aspects of the loan.
Fees and interest rates
Comparing the fees charged for an everyday account is quite simple. On average, account keeping fees for transaction accounts are around $5 a month, although many banks now offer fee-free accounts too. For savings accounts, most banks don’t charge monthly account fees but do charge for certain types of transactions or for supplying paper account statements. For example, you may be charged $3 per additional paper statement supplied or $2.50 for teller-assisted transactions.
Interest rates awarded on savings accounts are expressed as a percentage per annum, with interest awarded daily and compounded per month. This means the interest earned on the account is usually paid monthly, and you can choose either to reinvest this sum back into the account to compound your interest, or withdraw it and use it for other purposes. Savvy can help you compare interest rates by providing clear comparison information in an easy-to-understand format.
There are many different features and options available for transaction accounts. Features to consider include:
Your first consideration may be how much interest your savings will earn in your chosen savings account. Next comes the fees that you’ll be charged on your account. Ask yourself the following questions to compare the various features of savings accounts: