Switching bank accounts - a step-by-step guide
16 October 2008
With the current state of the financial market, interest rates on deposit accounts declining by the day, and monthly account keeping fees eating into our hard earned savings, there’s no better time than now to switch accounts.
The majority of us would have opened up our first bank account as a child with one of Australia’s four big banks – nab, Commonwealth, ANZ and Westpac. Fastrack 20 years to the future and chances are that you are still banking with the same institution. Despite the dismal interest rates and the incrementing servicing and transaction fees they have been charging you, you’ve decided to stick with them simply because you think it’s just too much of a hassle to make that change.
Don’t worry, because you’re not alone. Switching bank accounts can be especially difficult if you have several automatic transfers, deposits and payments set-up from that account. Things like bill payments, salary deposits, gym membership fees and automated transfers towards your mortgage or car repayments can make this process even harder.
Over the past 12 months the Federal Government has been working on making it easier for consumers to switch banks if they are not happy with their current provider. These measures will be put into action from November 1, 2008 so that both your current provider and the financial institution you prefer to bank with will help you make the switch.
Three things to consider when switching bank accounts
- Shop around and compare products online to find the one that is best for you. RateCity.com.au is perfect for this. Look at thing things like:
- ATM and Transaction fees. Check to see how much you are charged for each withdrawal you make from an ATM or when you pay for an item with your card. There may be a limit on the number of transactions you can make each month and any additional usage will incur a fee. If you are a high-transactor then its best to find an account that accommodates for such frequent usage, and vice-versa.
- Student waivers. Most major banks waive monthly account keeping fees and transaction fees for school and full-time students. There are some savings to be had here, so notify your bank if you have taken on full-time study recently.
- Interest rates. Most people use a bank account as an everyday account to receive wages, make transactions and pay bills, so there is often a fair sum of money moving in and out of this account. Considering that every bit that’s in there could be earning interest, it’s definitely worthwhile to find out what your current interest rate is so you can find another that will make your dollars work for you.
- Account keeping fees. Some accounts charge a minimum monthly fee which covers the cost of all or a maximum number of transactions. Depending on usage and type of transactions this could save you many dollars each month.
- If you are not fully satisfied with the service or product from your current lender, take the time to discuss your options with them, with the aim of striking a better deal – so better service, higher interest rate and no monthly fees.
- Weigh up all your options and see if you will save more and be better off in the long run by switching your transaction account to another institution.
How do I compare bank accounts?
RateCity.com.au is the best website to shop for all savings accounts and transaction accounts, as well as most other financial products. At RateCity.com.au, you can use expert comparative data from Canstar, Australia’s leading financial research and ratings firm. Canstar has analysed and evaluated hundreds of financial products to award five stars based on performance and features. The Canstar star ratings go much further than just looking at interest rates. They also take into account important features so you can be confident you are getting the best product.
Use our easy search tools to compare savings accounts at RateCity.com.au.
How do I switch bank accounts?
For more information on switching bank accounts visit the ASICs MoneySmart website.
- Compare cheapest transaction account
- Compare transaction accounts by preferred institution
- Compare transaction accounts by CANSTAR CANNEX star ratings
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