Transaction fees exceed $413.5 million this year

Transaction fees exceed $413.5 million this year

May 5, 2011

Australians are paying more than $413.5 million each year in monthly fees on their transaction accounts, despite there being at least 80 fee-free options available in the market.

The average monthly fee charged (based on the 40 percent of transaction accounts monitored by RateCity that have fees) is around $5, with fees ranging from $1 up to $10 per month.

It’s a surprising figure, given that consumers now have more options when it comes to finding no monthly fee transaction accounts, as more institutions slash account keeping costs to win customers.

Bank of Queensland (BoQ) is the latest to slash monthly fees, introducing the Day2Day Plus account, with unlimited free BoQ transactions and access to 3500 ATMs through the bank’s link with the RediATM network.

BoQ has followed in the footsteps of National Australia Bank (NAB), which dropped monthly account keeping fees on some of its transaction accounts in 2009.

Some of the other top transaction accounts without monthly fees available through RateCity include Bankwest‘s Hero Transaction Account, ING Direct‘s Orange Everyday, NAB‘s Classic Banking and Citibank‘s Plus Transaction Account.

Beware hidden fees and charges
Just because an account has no monthly fees does not guarantee that it will be free of all fees. Instead, some charge fees to use foreign ATMs and fees to use BPay and EFTPOS to name a few.

Of the 80 transaction accounts without monthly fees monitored by RateCity, only 10 are devoid of all major fees. And many are subject to conditions. For example, Citibank‘s Plus transaction account charges a monthly fee of $5 if customers fail to meet monthly salary credit of $3000 or more into the account.

These fees can really add up, so it’s important to read the conditions attached a transaction account and to be aware of any hidden fees and charges before you sign up.

The other downside of many monthly fee-free transaction accounts is that they pay minimal interest. For example, BoQ‘s Day2Day Plus has an interest rate of 0.01 percent, which is more than most others paying no interest at all. Given that interest on transaction accounts produces very little return for most customers, the banks argue that most people would rather avoid fees than earn the small amount of interest.

So if you’re one of the banking customers fed up with contributing to bank’s multimillion-dollar profits from fees, then consider switching to one of the many fee-free options available through RateCity. Just be aware that when comparing transaction accounts, it’s a good idea to weigh up all features and conditions.

 

 

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Learn more about bank accounts

How can you cash a cheque without a bank account?

You can cash a cheque without a bank account if you visit the bank that issued the cheque. For example, if somebody sends you a cheque from Bank X (as written on the cheque) and you visit Bank X, it’s likely that Bank X will let you cash the cheque – provided the person who wrote the cheque has enough money in their account. Bank X would probably charge you a fee for the service.

What do I need to open a company bank account?

To open a company bank account, you will probably have to provide 100 points of ID, an ABN and an ACN. You will probably have to provide the details of all signatories as well.

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 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.

Can you get a payday loan without a bank account?

Yes. Some payday lenders are willing to transfer loans to prepaid debit cards instead of bank accounts.

How can I check my bank account balance online?

Checking your bank account balance online is a simple process. Once you’ve logged in to your online banking, clock on the relevant account and the balance should be visible.

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.

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.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

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.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

How do I open a bank account if I'm under 18?

The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

Otherwise, you can apply by yourself online or at the branch of the bank, credit union or building society that has the account you would like to open. 

If applying online, you might be asked for a form of identification. For under-18s, this could be a Medicare card you’re listed on, your birth certificate and/or your current home address.

In most cases, you can verify your identity online (at the time of applying) or at the branch afterwards.

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.