It’s no secret that a lot of Australians are signed up to a bank account as kids or young adults and have never switched banking providers since. But if you’re considering switching bank accounts, you may be surprised to learn it’s an easier process than you think.
In fact, it only takes four steps, and you could be set up with a new bank account in a matter of minutes after choosing your ideal next account.
Whether you’re looking to ditch your mum and dad’s bank, want to move to a more tech-savvy provider, or are looking for a bank with accessible branches near you, there’s a range of reasons Aussies may switch bank accounts.
Let’s explore how you can find your best bank account and switch providers.
1.Compare your options
If you’re considering switching banks, there’s generally a good reason for this. And one way you can achieve this financial goal is by doing your research around your next bank account.
Firstly, start by working out any features or benefits you want the bank account to come with. Whether you’re a no-frills kind of banking customer, or after an account with the latest tech, these benefits and features will impact your final decision on a new bank account.
This may include:
- Online banking or apps
- Apple Pay, Google Pay, Samsung Pay
- Fintech, such as Round-Up savings tools linked to your bank account
- Overseas ATM facilities
- Access to domestic ATMs or branches
- Customer service
- Linked products, such as credit cards or home loan offset accounts.
Secondly, identify the potential fees involved with a bank account, such as account-keeping fees, ATM fees, dishonoured payment fees or foreign transaction fees. With 85 per cent of bank accounts not charging ongoing fees (100 of 117 accounts), it’s easier than ever to avoid these pesky costs.
Finally, decide what type of provider you want to switch to. Gone are the days of banking being reserved to traditional, bricks-and-mortar providers. There are a variety of bank account providers to choose from, including:
- Credit unions – member-owned financial institutions that aim to pass the savings on to customers.
- Mutual banks – credit unions or building societies which have become banks.
- Online providers – financial institutions that are entirely based online – no branches. Can be accessed via web or app.
- Neobanks– financial institutions that are entirely (or almost entirely) app-based.
The benefit of these smaller, competitor providers is that by cutting out branches they can reduce overhead costs and – in theory – pass these savings on to customers. Generally speaking, these competitor providers may charge fewer fees or offer higher interest rates because of this.
Further, unlike traditional banks which are dictated by board members and red tape, competitor lenders may have more flexibility and freedom to innovate in the fintech space. Meaning, customers may turn to online banks or neobanks, for example, for the latest in savings tools and app-technology.
One of the easiest ways to compare bank accounts across the Australian market is to use a comparison table. A comparison table lets you compare apples with apples, as you can view how bank accounts stack up to one another and filter your options via fees and features.
2.Open your new bank account
Once you’ve made a decision on your ideal next bank account, it’s time to apply and open it. Unlike other financial products, opening a bank account is a relatively quick and straightforward process.
Some providers may approve your new account in a matter of minutes. You’ll simply need to provide your personal details, such as your name, proof of identification, and tax file number (if earning interest). Depending on the provider, this may be done in-branch, online or via the bank’s app.
Some bank account providers may require you to deposit some amount of funds into the account to activate it. Once this is done, your account will be up and running. It may be worth setting up PayID at this step, as this should make the process of transferring funds from your old account to your new one seamless and instantaneous.
If you’re not planning on closing your old bank account, then the following steps may not apply.
3.Notify your work and redirect your bills
Communicate with your employer that you have changed bank accounts and provide them with your new banking details for the deposit of your income.
Next, you’ll need to redirect any direct debits that were linked to your old account. You’ll need to make a list of all direct debits and hop online or reach out to these organisations to update your banking details. Some bank account providers, such as Bank Australia, may actually handle this step for you and redirect your regular direct debits to your new account.
This may include:
- Subscription services, like Netflix and Stan
- Exercise memberships, such as gyms and yoga and pilates studios
- Buy now, pay later (such as Afterpay) Debit Card details
- Government services, such as ATO or Medicare details
Keep in mind that there may be a bill or two that you forget about, so it may be worth leaving $100 or more dollars in your old bank account for up to 3 months, just in case any monthly or quarterly bills you’ve missed are deducted. This will prevent your old account from stinging you with a dishonoured payment fee for a bill you’ve forgotten to redirect, or late payment fees from the company the money is owed to.
4.Close your old account
Now your new account is set up, your income is being deposited into it, government services have been updated and your bills and subscriptions have all been directed, it is time to close the old bank account.
Firstly, transfer all remaining funds to your new account. Then either go into a branch, pick up the phone or hop online and request to cancel your account. You may need to provide personal identification at this stage.
And it’s as easy as that! Once the old bank account provider gives you confirmation the account is closed, you’re all done. Now you can sit back and relax and enjoy the perks and benefits your new bank account offers.