Money in, money out

Money in, money out

Everyday transaction accounts have been around long enough to become one of the most common accounts to be offered by banks and credit unions. However, the recent intense competition witnessed among online savings account providers offering eye-catching interest rates has grabbed the spotlight and overshadowed many of these long standing everyday transaction accounts.

What used to be simple is now specialized and personal transaction accounts differ widely in their features and suitability. Finding the best account for you involves shopping around to avoid unnecessary fees and charges. But first, consider the following points.

Types of transactions

Before deciding on a transaction account, it is wise to determine the types of transactions that you will frequently make each month. Here are the most common:

  • ATM via your own institution
  • ATM via another institution
  • EFTPOS
  • Internet transfers
  • Cheques
  • Direct debit
  • Bpay
  • Over the counter – branch access

Number of Transactions

 

After ticking off the above checklist, start estimating the total number of transactions that you make a month for each type e.g. how many EFTPOS or ATM withdrawals. You do not have to be a mathematical whiz to come up with an estimate because you can either look at your previous month’s printed or internet statement from your bank or you can simply estimate your weekly transaction behaviour. The number of transactions you make for each type of transactions is vital because financial institutions offer a wide variety of differently ‘priced’ personal transaction accounts such as:

  1. An account that charges you a flat monthly account-keeping fee with the benefit of having access to free unlimited own institution banking transactions.
  2. A pay-as-you-go account where you only pay for the charges per transaction.
  3. An account that charges you both a lower monthly account-keeping fee and charges a lower per-transaction fee.

Best Transaction Accounts Out There

The trick in choosing the best type of transaction account involves you having to estimate your monthly transaction costs against the flat monthly account-keeping fee charged. Intuitively, what this is means is, if you seldom transact, go for a pay-as-you-go account, and if you transact a lot, go for a flat monthly fee account. Also, note that most institutions still charge you for transactions that you make with other institutions, such as using another institution’s ATM.

However, if you are someone who rarely transacts and only requires the most basic types of transactions; you may want to consider an online savings account which doubles as a savings account while providing you with the benefit of conducting a few transactions. Another question you should ask yourself is whether you are prone to overdrawing your account balance. Overdrawing on your account will lead to the payment of hefty penalties among many institutions and these penalty amounts vary greatly between institutions.

Monthly account-keeping fees charged by institutions for an everyday transaction account are mostly between the ranges of $3 to $6, with $5 being the most commonly charged fee.

Below is a table of everyday transaction accounts with low transaction fees and no monthly account keeping fee.

Everyday Transaction Account with NO Account Keeping Fee

Company Product Monthly Account keeping fee Direct Debit fee EFTPOS transaction fee ATM withdrawal own network fee ATM withdrawal other network fee
Hume Building Society Youth Extra S5 Nil Nil Nil Nil $1.25
Police Credit Mulitpack-At Call S1 Nil Nil Nil Nil Nil
Qantas Staff CU At Call Deposits Nil Nil Nil $2.00 $2.00
Unicom Credit Union Access Account Nil Nil Nil $1.50 $1.50
Bendigo Bank Ultimate Account Nil Nil $0.70 $0.70 $1.50
ANZ Bank Equity Manager Account Nil Nil $0.50 $0.50 $0.50

Source: CANSTAR CANNEX 19/09/07

Here is a table of banks’ everyday transaction accounts with low monthly account keeping fees.

Everyday Transaction Accounts with no Direct Debit, EFTPOS Transaction and ATM Own Network Fees

Company Product Monthly Account keeping fee Direct Debit fee EFTPOS transaction fee ATM withdrawal own network fee ATM withdrawal other network fee
nab Smart Direct $3.00 Nil Nil Nil $1.50
Westpac Choice eAccount $3.00 Nil Nil Nil $2.00
Commonwealth Bank Streamline e-Access $4.00 Nil Nil Nil $1.50
Bank of Queensland Reverse Charges Account $4.00 Nil Nil Nil $2.00
ANZ Bank Access Advantage $5.00 Nil Nil Nil $1.50
St George Bank Express Freedom $5.00 Nil Nil Nil $1.50
BankWest Lite Transaction Account $5.00 Nil Nil Nil $1.95
SUNCORP Everyday Options $5.00 Nil Nil Nil $2.00

Source: CANSTAR CANNEX 19/09/07

Although most institutions charge a fee when you use another institution’s ATM machine, the tables above show the trade-off for zero monthly account-keeping fees is usually extra fees when you use your own institution’s ATM. That’s why it is crucial to focus on your own spending habits. Choosing the wrong transaction account could mean you are paying fees much greater than the flat fee charged by some for unlimited transactions. The key to a happy relationship is the same as with any other type of financial product: make it your business to know the product and its conditions before deciding if it is right for you.

How do I compare transaction accounts?

RateCity is the best website to shop around on for everyday transaction accounts and most other financial products. At RateCity, you can use expert comparative data from CANSTAR CANNEX, Australia’s leading financial research and ratings firm. CANSTAR CANNEX has analysed and evaluated hundreds of accounts to award five stars to only the very best. The CANSTAR CANNEX 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 transaction accounts at RateCity.

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Learn more about bank accounts

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 account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

Can you open another account at the same bank?

Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.

Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.

Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.

Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

Can British expats still open bank accounts?

As a British expat, you can open an Australian bank account, and you can apply for an account the same ways an Aussie would. You can even open an account online from the UK prior to relocating.

If you’re overseas, the bank you choose to open an account with may call you to provide you with our new account details beforehand. You can then have your ID verified within a branch once you’ve arrived.

And if you’re already living down under, the following list outlines the types of information required by most banks when opening an Australian bank account.

  • Australian residential address
  • Tax file number (TFN) or a TFN exemption
  • Identification (this can be your passport)

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.

Can I set up a bank account online?

Most Australia-based lenders will allow you to set up a bank account online. Requirements vary from lender to lender, but you will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary ID.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

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.

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

How do you delete your bank account from PayPal?

Deleting your bank account from PayPal is a simple three-step process:

  • Go to your Wallet
  • Choose the account you’d like to delete
  • Click ‘Remove bank account’

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

How do I transfer money from Paypal to my bank account?

Transferring cash from Paypal into your bank account is simple…if you have a Paypal account that is.

Once you’re logged into your Paypal account, the account balance will appear on your home page. Below your balance are two options:

  • Add money
  • Withdraw money

Choose option two if you want to transfer money from your Paypal account to your personal bank account.

The next screen will prompt you to either enter new bank account details or choose a bank account that’s connected to Paypal. You can always add more bank accounts to your Paypal profile.

Another way to transfer out of Paypal is by jumping to the wallet tab on the top menu, and clicking ‘transfer money’. Both options will give you the same result.