From paper to plastic – how to ditch fees for good

From paper to plastic – how to ditch fees for good

A small fee on your last bank transaction might feel like a drop in the ocean, but if you’re ignoring all your account fees, you may soon be struggling to keep your head above water.

If you take the time to do your research, you could ditch the pesky fees for good.

Ongoing fees

Ongoing or account keeping fees are regular payments charged by your lender outside of interest. They’re common across most financial products, including home loans, car loans and credit cards.

Some of the most frustrating ongoing fees come with bank accounts, as it’s very easy to avoid paying them if you shop around.

Bank accounts with ongoing fees

Company

Bank account

Account keeping fee

Notes

People’s Choice Credit Union

Everyday Account

$6.50

Waived if you have an active Home Loan Package, Financial Planning Relationship or meet three or more additional criteria.

AMP Bank

Bett3r Pay

$6.00

Waived if you deposit $2000 in your account each month

Bank of us

Go To

$6.00

Waived if you deposit $1000 in your account each month

Bankwest

Qantas Transaction Account

$6.00

Waived if you deposit $2000 in your account each month

Source: RateCity.com.au. Data accurate as at 09/09/2019 

Some lenders, like the ones mentioned above, will charge you an ongoing/monthly fee. However, these will typically be waived if you meet certain criteria. If you’re set on sticking with a lender that charges these kinds of fees, try to ensure you stick to their rules. $6 a month can quickly turn into $72 a year if you’re not careful.

RateCity.com.au research has found that out of the 144 bank accounts in their database, 43 have ongoing fees. If only 30 per cent of bank accounts have ongoing fees, perhaps it’s time to consider your options?

Each of Australia’s big four banks offers an everyday bank account without ongoing fees, as do a range of smaller providers. If you’ve been with the same bank account since you were a kid that charges an ongoing fee, and you’re looking to ditch it for good, consider switching to a no-fee account.

Annual fees

Annual fees are, as the same suggest, a fee your provider will charge you once a year. These are common in credit cards and home loans, as the annual fee helps account for their benefits, such as a mortgage redraw facility or credit card reward points.

Credit cards with higher-than-average annual fees

Company

Credit card

Purchase rate

Annual fee

Qantas Money

Qantas Premier Titanium

19.99%

$1,200

Citi

Prestige (Citi Rewards Program)

20.99%

$700

American Express

Qantas American Express Ultimate Card

20.74%

$450

Source: RateCity.com.au. Data accurate as at 09/09/2019

Credit cards can have some of the highest annual fees around, but you can’t paint credit card fees with the same brush. Higher fees can be due to the rewards programs and premium services offered to customers. If these services are important to you in a credit card, it may be hard to avoid an annual fee.

There are 28 credit cards without annual fees on RateCity.com.au’s database. If you want to cut annual fees from your budget, you’ll need to do your research.

Use comparison tables to filter out accounts that charge annual fees. You’ll also be able to compare interest rates, features and other fees associated with the product to keep costs down.

Credit cards with zero annual fees

Company

Card

Annual Fee

CUA

Brisbane Heat supporters’ Low Rate Credit Card

$0

First Option Bank Ltd

Low Rate Visa Credit Card

$0

St.George Bank

No Annual Fee Visa

$0

Source: RateCity.com.au. Data accurate as at 09/09/2019

Overseas fees

Everyone’s felt that post-holiday regret when you finally see how much overseas fees stung your shopping spree.

The most common overseas fees are currency conversion fees and ATM withdrawal fees. While you can’t control the exchange rate of the country you’re visiting, you can choose credit cards or bank accounts that don’t charge these fees.

RateCity.com.au research shows the average overseas ATM fee charged by Australian banks is $4.13 per transaction but can climb as high as $5.50. The average currency conversion fee is 3.13 per cent of the transaction value.

Transaction accounts with no international fees

Bank account

Overseas ATM fee

Fee from ATM provider

Currency conversion fee

Admin fees

Notes

ING Orange Everyday

$0

Refunded

$0

$0

Must deposit $1k and make 5 transactions monthly

Citibank Plus

$0

At cost

$0

$0

Fee-free international money transfers

RAMS Action

$0

At cost

$0

$0

Overseas ATM must display the Cirrus or Maestro logo

Source: RateCity.com.au. Data accurate as at 09/09/2019

For example, think about how often you withdraw cash in America for tipping. Say you withdrew money five times over your trip, you’d be charged on average $20.65 for the privilege.

Again, doing a little homework and choosing a fee-free provider could save you the laundry list of overseas fees you might cop on your next holiday. 

Bills, bills, bills

Consumer Affairs Victoria (CAV) recently reminded Victorians that receive paper bills they may be eligible for fee exemption.

According to a release by CAV, “an average customer receiving paper bills for their electricity, gas, banking, credit card and phone services could be paying $120 a year just on paper billing fees”.

Providers have exemptions, however, from paper billing fees if customers are:

  • older Victorians
  • registered for a concession
  • receive income support
  • on a hardship program, or
  • do not have access to the internet.

Director of Consumer Affairs Victoria, Sam Jenkin, recommended Victorians “contact your providers and ask if you are eligible for an exemption from paper bill fees.”

“It may be only a couple of dollars for each bill, but it can quickly add up – especially for people on a low income,” Mr Jenkin said.

Avoiding paper bills is a priority for many environmentally conscientious Australians. If you’re still receiving your bank statements and bills via post, switch to email bills to avoid these fees.

If you rely on paper bills for any of the reasons listed above, speak to your bank – you may be able to have the fees waived. You’d be surprised at what your bank is willing to do if you just ask. 

How to avoid pesky fees: 

  1. Keep $100 in your account. You never know when an unexpected bill might take your account into the negatives. Keeping at least $100 in your bank account at all times can hopefully help you avoid accidental overdrafts.

  2. Meet the criteria. Some fees can be avoided as easily as ensuring you meet minimum deposit amounts in your bank account. Double check the fine print on your financial products and make sure you’re meeting all the criteria.
  3. Make direct deposit bill payments. Some companies will charge you a fee just for taking your money – usually if you use a credit card to pay your bills. Consider making your bill payments direct deposit only, and then setting these up to be paid automatically. This will cut out credit card fees and help you keep on top of bill due dates, so you also avoid overdue fees.
  4. Use comparison tools. Looking for a new credit card that doesn’t charge fees? It’s as easy as doing your research. Use comparison tables to filter through credit cards that don’t charge annual or ongoing fees.
  5. Don’t be afraid to ask. Banks want your business. If you’re considering switching to another bank because of the fees your current bank is charging you, you’d be surprised at what they’d be willing to do to keep you on the books. For example, use a comparison table to find a few bank accounts options that don’t charge ongoing fees.

    Call your bank and ask if they’ll match this. Threaten to leave – and be prepared to do so if they won’t cut the fees. After all, you’ve now got a list of fee-free options to choose from.

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Learn more about bank accounts

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.

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.

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:

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

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 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.

Do you need a bank account to get a credit card?

To get a credit card, you need to show proof of income, which will almost certainly require you to have a bank account.

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.

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.

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 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 you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

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.

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.

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.