Save more with branchless banking

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Try this quick quiz. When was the last time you stepped inside a bank branch? If you can’t remember, chances are branchless banking for your savings account is for you. Chris Walker reports.

December 1, 2009

When Westpac recently announced plans to open new branches, reversing a 20-year policy of branch closures, it may have been a case of too little, too late. 

Over the last two decades a great deal has happened in retail banking, and between the rise of online banking and the growth of ATMs, many of our basic transactions are serviced electronically. In August 2009 alone, Australians collectively completed around 70 million transactions at ATMs around the country – almost double the number made in the same month 10 years ago.

Not only is electronic banking fast and convenient, it can also be a lot cheaper. Indeed many banks penalise customers with high fees for over the counter service.

If you’re comfortable with the notion of not having a local branch, a vast world of choice opens up including the option to bank with financial institutions like smaller credit unions that may have very few branches, through to online banks that have no branches at all. As a branch network costs a great deal to maintain, many branch-free institutions can afford to offer good deals on financial products.

With that said, there are a few circumstances where having access to a branch can come in handy. For example if you regularly deposit cheques into your savings account, counter service may be essential. RaboPlus for instance, doesn’t accept cash or cheques into its RaboDirect PremiumSaver account. The way around this is by first depositing cheques into a bricks and mortar account and then transferring the funds electronically to RaboPlus. But some customers may see this as a lengthy and fiddly process.

A number of financial institutions have navigated this problem by teaming up with other banks or institutions. ING Direct for example, allows over-the-counter access to its new Orange Everyday account at Australia Post Outlets.

Banking electronically, while cost effective, can call for a certain amount of forward planning. In many cases, transactions completed after a specific time each day will not be processed until the next working day. And that could mean being left high and dry if you need funds in an emergency. If you can overcome this hurdle, doing away with a branch can mean enjoying high returns, low fees and the relief of not having to spend mid-week lunch breaks queuing at a bank counter.


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