How transaction fees work

How transaction fees work

By Jackie Pearson

The right transaction account for you will depend on how you do your banking, whether you have multiple accounts and loans with the one provider and how many transactions you make per month.

REBATES FOR LOYALTY

Let’s say you have your transaction account, mortgage, a term deposit and a credit card all with the same bank. It may be worth your while to be with an institution that uses rebates.

Some accounts are structured to reward customers who do more business with that institution by offering rebates of standard fees charged. Bendigo and Adelaide Bank, for example, gives customers a monthly fee allowance (a rebate) that they use to reduce the eligible monthly transaction fees they incur on their account.

Bendigo and Adelaide Bank’s chief executive of retail banking, Mike Hirst says, “We also reward customers who have more than one account with us by offering additional transaction account rebates for these other accounts.

“If they have a term deposit investment common fund, debenture, personal loan or credit card with us, they will be entitled to increase their rebates on an eligible account each month,” says Hirst.

If you’re with a bank that offers fee rebates for customer loyalty, you will still accumulate transaction fees on your every day account each month and those fees will be charged to your account at the end or beginning of each month. You will see them listed on your statement. Any rebates you’re entitled to are then subtracted from the fees and the net amount is debited from your account.

LIMITED TRANSACTIONS OR FLAT MONTHLY FEE

St George Bank is one of a growing number of brands that now offers different types of transaction accounts for different users: either with a set number of free transactions per month or unlimited transactions for a flat monthly fee.

“For example, for a flat $7 per month fee our Complete Freedom Account provides you with the convenience and flexibility to undertake unlimited electronic transactions … St George branch transactions and personal cheques,” a spokesperson for St George explains.

NAB has a similar system for enabling people to avoid monthly account service fees – arrange to have your salary or any regular deposit paid into your NAB smart everyday bank account. The amount you will need to deposit each month depends on which account you hold – $2500 for NAB eBanking, at least $5000 a month for NAB Gold Banking.

If you maintain a high balance and make very few transactions, a fee with a limited number of transactions combined with a way to avoid the maintenance fee is your best option. If you make a high number of transactions you are probably better off with the “unlimited transactions for a flat fee” model.

ALWAYS USE OWN-BRAND ATMS

One of the easiest ways to incur fees is to use ATMs that don’t belong to your bank’s network. Each time you do you will incur a “foreign ATM” fee (usually $2). Withdraw money from five foreign ATMs a month and you will incur $10 in unnecessary fees. Non-brand ATM fees can’t usually be reduced by fee rebates.

TIPS FOR BEATING FEES

  • Monitor your banking habits and keep a record of the number and type of transactions you make.
  • Make larger withdrawals less frequently to limit the number of withdrawals you make
  • Use your debit card and select “credit” when withdrawing cash or making purchases to avoid transaction fees.
  • Ask for “cash out” when using EFTPOS to make two transactions for the price of one.

 

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Learn more about bank accounts

Can I close a bank account with pending transactions?

You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

How do you find a bank account number by name?

For privacy reasons, Australian banks won’t hand out account numbers or other details about their customers. However, if you provide a bank with a BSB and account number, they should be able to confirm if those numbers belong to one of their customers.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

Can you find your bank account number online?

If your bank offers online services, you should be able to find your bank account number online by logging into your account on your bank’s website and checking your details there.

Keep in mind that each type of account you have with a bank comes with a unique account number. This means if you have a bank account as well as a savings account, for example, your bank account number and your savings account number will be different.

If you don’t have access to your bank account online or can’t login, you should be able to find your account number on a mailed bank statement, if you have one.

Alternatively, you can call your bank’s customer service number or visit a branch to retrieve your account number.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

Do you need a bank account to sell on eBay?

You don’t need a bank account to sell on eBay. But if you don’t have a bank account, you must provide either a credit card or debit card.

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

What do you need to open bank accounts?

Opening a bank account is one of the simplest online tasks you could perform. The hard part is deciding which type of bank account you want to open.

All banking institutions have a website where you hit ‘apply’ on the account of your choice and step through an application in less than 10 minutes.

Here’s a list of information that is generally required for applications.

  • Identification (driver’s licence, passport, proof of age card, proof of citizenship and/or birth certificate)
  • Tax file number (so you don’t get charged the highest tax rate)
  • Address, contact email and phone number

If you decide to open a new account at the branch, make sure you ask beforehand what information you need to take with you, or take all of the above to be safe.