The average Australian household currently is paying around $9 each week in bank fees, according to a recent report from the Australian Bankers Association (ABA).
That’s the bad news. The good news is that for a third year in a row, households paid less in bank fees.
In fact since 2010, the ABA reports that total bank fees paid by Australian households have fallen by $1.2 billion or 22 percent. Businesses, however, were slugged with a range of hefty increases – bringing the total haul to a record $11.4 billion in bank fee revenue.
“It is good news that Australians are paying less in bank fees as this is money we could all be putting to better use,” said Paul Clitheroe, founding director of financial planning firm ipac and chairman of the Australia Government Financial Literacy Board.
“However we could still do better and 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 added.
Mr Clitheroe 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.
“In regards to everyday accounts for instance, there are plenty of banks that have done away with fees altogether,” said Clitheroe.
Alex Parsons, CEO of RateCity, agrees there is too much “lazy money” wasted on bank fees that are largely avoidable.
“It’s good to see a fall in households paying bank fees even if it is small in comparison to the $4.1 billion that was paid last year. The growing popularity of financial comparison websites in Australia, such as RateCity, and greater awareness of what deals are available is certainly helping households switch and save money.”
“However, it’s disappointing to see so much lazy money still being wasted on bank fees, when most of these fees are avoidable.”
According to RateCity’s database for example, over 50 percent of personal transaction accounts don’t charge monthly account keeping fees (78 out of 135).
“The only way our banks will be more competitive with fees is if more Australians make a stand by comparing products online and switching to low or no fee deals,” said Mr Parsons.
“There are plenty of options out there with low or no fees and banks are often waiving fees to retain and win new customers. So don’t let your money get lazy, take it back from the banks and keep it in your own pocket.”
Clitheroe adds, “The best way to get the most value from your financial products – including not just from fees but also higher returns on your savings accounts, is to shop around.
“Comparing products is just smart money management,” he said.