Australians are wasting more than $1 billion in transaction account-keeping fees each year, according to new research from RateCity.
A RateCity analysis of Reserve Bank of Australia figures found that Australians are unnecessarily paying up to $120 a year just to hold a transaction account.
Yet, of more than 130 transaction accounts on the market, just under half charge a monthly fee – ranging from $3 to $10. Many accounts also charge transaction fees each time the account is used and penalty fees when the account is overdrawn.
Alex Parsons, CEO of RateCity, said it’s easy for Australians to avoid paying these fees.
“There are number of accounts out there that don’t attract any fees so there’s no reason why people should be paying fees to have a normal bank account,” he said.
“Paying a fee doesn’t necessarily equate to better service or increased features on your transaction account, so if you are forking out money for an everyday account then shop around, switch to a free account and pocket the difference.”
Parsons said a number of institutions had either scrapped accounting-keeping fees altogether, or given consumers an easier way to get a fee waived.
“Aside from the 70 accounts that don’t have ongoing fees, many institutions will waive a fee if you make a minimum monthly deposit, such as your wage, into the account.”
The switching process has been simplified too, he said. “With the new bank arranging a transfer of all automatic transactions linked to the customer’s old account and informing associated creditors and debtors about the new account details.”
These changes have significantly reduced the amount of money Australians waste on account-keeping fees in recent years, according to Parsons.
“In 2008 Australians forked out around $2 billion in personal transaction account fees. The fact that we’ve almost halved that is great news. But there is still a way to go – far too much money is being wasted accessing our own money.”