Banks haul in record fee revenue

Banks haul in record fee revenue

The average Australian household currently is paying around $9 each week in bank fees, according to a recent report from the Australian Bankers Association (ABA).

That’s the bad news. The good news is that for a third year in a row, households paid less in bank fees.

In fact since 2010, the ABA reports that total bank fees paid by Australian households have fallen by $1.2 billion or 22 percent. Businesses, however, were slugged with a range of hefty increases – bringing the total haul to a record $11.4 billion in bank fee revenue.

“It is good news that Australians are paying less in bank fees as this is money we could all be putting to better use,” said Paul Clitheroe, founding director of financial planning firm ipac and chairman of the Australia Government Financial Literacy Board.

“However we could still do better and while $9 a week might not sound like much, annually this equates to being slugged closer to $470 by financial institutions and almost $5000 over a decade,” he added.

Mr Clitheroe urged consumers to take a look at their main financial products including their credit cards, home loans and everyday bank accounts, to identify where savings are possible.

“In regards to everyday accounts for instance, there are plenty of banks that have done away with fees altogether,” said Clitheroe.  

Alex Parsons, CEO of RateCity, agrees there is too much “lazy money” wasted on bank fees that are largely avoidable.

“It’s good to see a fall in households paying bank fees even if it is small in comparison to the $4.1 billion that was paid last year. The growing popularity of financial comparison websites in Australia, such as RateCity, and greater awareness of what deals are available is certainly helping households switch and save money.”

“However, it’s disappointing to see so much lazy money still being wasted on bank fees, when most of these fees are avoidable.”

According to RateCity’s database for example, over 50 percent of personal transaction accounts don’t charge monthly account keeping fees (78 out of 135).

“The only way our banks will be more competitive with fees is if more Australians make a stand by comparing products online and switching to low or no fee deals,” said Mr Parsons.

“There are plenty of options out there with low or no fees and banks are often waiving fees to retain and win new customers. So don’t let your money get lazy, take it back from the banks and keep it in your own pocket.”

Clitheroe adds, “The best way to get the most value from your financial products – including not just from fees but also higher returns on your savings accounts, is to shop around.

“Comparing products is just smart money management,” he said.

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Learn more about bank accounts

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:

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

Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

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 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.

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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.

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How do you transfer money from PayPal to a bank account?

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The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

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 foreigners open bank account in Australia?

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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.

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.

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.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

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:

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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).

Can Centrelink access your bank account?

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This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.