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How to switch banks

How to switch banks

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.

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Fact Checked -

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.



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Learn more about bank accounts

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a 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.

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.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

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.

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)

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 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.

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.

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)

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’

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.

How to transfer money to another bank account

Transferring money to another bank is often called a bank transfer, and it can be done a few different ways.

Customers generally need three pieces of information to transfer money to another bank account. Customers need the account name, BSB and account number of the account they wish to transfer money to.

One way of transferring money to another bank account is in a branch with the help of a staff member; they will often give you a receipt as well as confirmation of the transfer.

Transfers can be also made via internet banking and phone banking.

Some banks also allow customers to make transfers via partnered ATMs, especially if the account is with the same bank.

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.