Latest research from the Australian Bankers’ Association reveals low-income earners are forking out an estimated $163 million each year in avoidable bank fees.
Steven Munchenberg, chief executive of the ABA, said industry had worked hard to introduce ways to make basic banking products accessible to all.
“Many banks have offered a basic account for some time, but community and consumer groups advised us these accounts don’t always provide the features customers need to conduct their banking transactions,” he said.
“They have also told us that information about these accounts can be hard for customers to find, or customers may not be aware that they may be eligible for one of these accounts.”
To simplify the process for consumers the ABA has launched a new website, www.affordablebanking.info, where customers can check if they are eligible for one of these basic accounts, which typically require a concession card issued by the Government.
The website also lists the Australian banks offering basic bank accounts, which includes the major four banks – ANZ, Commonwealth Bank of Australia, NAB and Westpac – as well as Citibank and ING Direct.
Michelle Hutchison, spokeswoman for RateCity, said there was plenty of choice for customers looking for transaction accounts with no account-keeping fees.
“Whether you’re struggling financially or not, there’s no need to pay fees,” she said.
“If you are on a low income, paying $5 a month will impact you.”
Hutchison urged consumers to also look at the cost of transactions, not just the cost of holding the account, because small amounts can add up. For example, she said, someone who averages 35 transactions per month (ATM, branch, cheque, EFTPOS, internet and BPAY) pays an average of $13.95 and up to $62.66 to do so.
The RateCity database shows that of the 135 personal transaction accounts, 10 offer no monthly account-keeping fees and no transaction fees. There is a further 34 accounts with no monthly account-keeping fees and allow nine free transactions per month on average.
The push to help Australians access cheaper finance products comes after it was revealed that the average household currently is paying $9 each week in bank fees.
Paul Clitheroe, founding director of financial planning firm ipac and chairman of the Australian Government Financial Literacy Board said this is money we could all be putting to better use.
“While $9 a week might not sound like much, annually this equates to being slugged closer to $470 by financial institutions and almost$5000 over a decade,” he said.
He urged consumers to take a look at their main financial products including their credit cards, home loans and everyday bank accounts to identify where savings are possible.