Give your transaction account a financial health check

Give your transaction account a financial health check

It can be easy to overlook the importance of having the right transaction account, but this new financial year is the perfect time to give the place you store your money a financial health check.

Have you been using the same transaction account since you were a kid? Is this because your parents are also with the same bank? You may be losing money in fees or missing out on some serious perks just because you’ve never compared your options.

To know if you’re with the right transaction account, you’ll want to perform a financial health check. This is where you ensure your financial products are helping you to reach your goals while keeping avoidable costs down.

To give your transaction account a financial health check, you can start by asking yourself a few questions.

1. Am I paying unnecessary fees?

RateCity analysis found that across its database, 26 per cent of transaction accounts charged monthly account keeping fees.

This means that out of 155 accounts, there are 115 that don’t sting you for the convenience of banking with them. This makes it a no brainer to try and choose an account to avoid paying monthly fees.

Typically, these ongoing fees are charged when you’re unable to meet minimum requirements for the account – usually depositing a minimum amount each month.

Take a look at your account’s conditions and triple check that you’re both across them and able to meet them. Perhaps the minimum deposit amount has increased since you joined? Perhaps you’re no longer earning the same income because of the economic impacts of COVID-19? All of this needs to be factored into, not only any loans or credit cards you have, but also your transaction account.

2. Am I paying fees to use foreign currency?

When you use your debit card internationally or on overseas websites to shop you may be charged a foreign transaction fee, which occurs when currency conversion is required. This is typically around 3 per cent of the purchase price.

This means that if you were shopping online on an American website and spent $USD500, you may be charged an additional USD$15 in foreign transaction fees. Once you convert this back to Australian dollars, the costs can really add up, especially when these fees can be avoided.

The most competitive transaction accounts may offer customers flexibility on overseas purchases by waiving the cost of foreign currency conversion fees and even allowing you to hold foreign currency.

In fact, RateCity analysis found that across its database, 7 out of 155 transaction accounts either refund, or don’t charge, foreign transaction fees.

Further, some transaction accounts charge you when you withdraw funds from overseas ATMs, sometimes as high as $5.

There are 11 transaction accounts on the RateCity database that either refund, or don’t charge, overseas ATM withdrawal fees. If you’re planning an overseas trip in the future, you may want to consider opening an account that doesn’t charge these fees or waives them entirely.

3. Am I getting any extras?

Some transaction account providers offer customers perks and features for using their debit cards. This may be something you now consider valuable in your banking, and a financial health check may reveal if other accounts that do offer these perks are worth switching to.

Transaction account perks may include:

  • Cashback offers
  • Qantas points
  • Gifts, such as a bottle of wine

Only a handful of transaction accounts offer these perks, so you’ll need to do your research and shop around to find the right one for your needs.

Luckily, RateCity has done the hard work for you.

RateCity has rounded up some of the most competitive transaction accounts and rewarded them with a coveted RateCity Gold Award. These awards factor in fees, payment types, customer service access, perks, ability to hold foreign currency and more.

Best Transaction Accounts for 2020

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Learn more about bank accounts

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 open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.

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 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 link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

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.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

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.

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 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 you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

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.

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 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).