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Learn more about bank accounts

Bank accounts are the cornerstone of our personal finances, but we often don’t give ours a lot of thought.

This is a shame, because if you search bank accounts you can often find an alternative that offers lower fees, better access and a range of perks that provides a superior banking option.

We’re going to talk about the importance of comparing bank accounts, so you can get the most of your savings and put yourself in a position where you can meet your larger personal goals, while also catering for the smaller-scale financial expenses you encounter in your day-to-day life.

What type of bank accounts are available?

When search for the best bank account in Australia, it’s important to be aware of the different types of bank account offered by financial institutions, and how these bank accounts are set up to cater for different money goals individuals or couples might have over the short and long term:

  • Transaction accounts – These type of bank accounts are designed to make meeting your day-to-day expenses as simple as possible. Transaction bank accounts will typically be where people receive their pay, withdraw cash or pay their bills. These bank accounts are generally highly accessible, but they also offer lower rates of interest, so they might not be the best option if you’re looking to save up for a holiday or other major expense.
  • Savings accounts – When people search for the best savings account, they’re looking for an account with a comparatively higher level of interest that allows them to save for larger financial goals and grow their wealth in a manner that’s generally low-risk. Savings accounts typically aren’t as accessible as transaction accounts, but can sometimes provide incentives for people making regular deposits and can be a useful part of anyone’s broader financial strategy.
  • Joint accounts – These are accounts opened in two names, generally by people who are in a relationship. Joint bank accounts can be advantageous as a manner of simplifying your banking and lowering your fees when you’re in a trusting relationship, but should the relationship turn sour these bank accounts can become quite complicated.

What are the pros and cons of bank accounts?

When you’re comparing the market, and looking to find the best transaction account for your financial situation, it’s important to consider the pros and cons in your bank account search:


  • Easy to access – Bank accounts that are designed to cover your day-to-day expenses, are set up with the purpose of being easy to access in mind. Whether you need to pay a bill online, withdraw cash, transfer money to a family member or make sure your rent is up to date, the best transaction accounts generally make this process simple, easy and painless.
  • You’re not locked in – A common misunderstanding with bank accounts is that you’re locked in by rigid measures. While you may incur some exit fees, more often than not you’re welcome to change your bank account whenever you like. This is part of the reason why it’s somewhat strange that people don’t compare the market more often to find a better bank account.
  • You earn interest – While it might not be as much interest as you’d earn on a savings account, term deposit or other investment option, transaction accounts do earn interest for their holders, providing the potential to grow wealth in a low-risk environment.
  • Your money is safe – Transaction accounts can be one of the safest places to keep your money, and part of the reason is the guarantee offered by the Australian government. The government guarantees deposits (for up to $250,000) in authorised deposit-taking institutions (ADIs) like banks, building societies and credit unions. This means, even if the economy is performing terribly, you can be confident that your savings are safe.


  • Temptation to spend is high – The greatest strength of a transaction account (ease of access) can also be its greatest weakness. When your funds are only the press of a button away, you can easily be tempted to spend more than you should, and this can make it difficult to meet your broader financial goals. Therefore, it’s important to be very careful when opening an everyday transaction account, and a good idea to consider opening a savings account in conjunction to this, to make it easy to meet your larger, long-term savings goals.
  • Interest rates are subject to change – While financial institutions like banks, building societies and credit unions take their cues from the Reserve Bank of Australia (RBA), they’re not beholden to the RBA’s official cash rate and can often change their interest rate at the drop of the hat. So while you might have an interest rate you’re comfortable with when you sign up, you could find yourself in a very different situation six months down the track.
  • Interest lower than a savings account – Another factor to consider when comparing the market and performing a search for the best bank account in Australia is the fact that regular transaction accounts generally offer interest that is lower than savings accounts. This makes it difficult to grow your wealth if you’re not making regular deposits, and having a balance that is below a certain level can effectively negate the effect of interest, depending on the interest rate and the level of inflation in Australia.
  • Fees can start to add up – Another problem people run into with regular day-to-day transaction accounts is the fees, which after a while can start to add up. When you’re looking to compare bank accounts, it’s important to closely check the fine print, and make sure the bank account fees you’re obliged to pay as an account holder are something you’re comfortable with. Otherwise, you could dig into your savings unnecessarily.

What sort of fees can I expect to pay with a transaction account?

When you search the best bank accounts in Australia and are looking for a transaction account that suits your needs, it’s important to be aware of the regular fees of a bank account holder.

Different funds offer different levels and types of fees, and this should be a factor when shopping around. Bank account fees you may be charged with a transaction account include:

  • Account-keeping fees – These are the fees that are typically associated with the upkeep of your account by your bank, building society or credit union. Different financial institutions offer different levels of fees, and some waive fees for a period as a sign-on bonus.
  • Phone banking fees – These are the fees bank account holders incur when they’re undertaking phone banking transactions, queries and account changes.
  • Internet banking fees – Bank account holders may also have to pay internet banking fees on certain transactions and interactions.
  • Overdraft fee – Some transaction accounts have hefty fees for bank account holders who have overdrawn. It’s important to consider these when comparing bank accounts.
  • Transaction fees – Certain financial institutions impose fees for select transaction types, which is why it’s important to read the fine print in your product disclosure statement (PDS) and make sure you know what you’re getting in to before you sign on the dotted line.

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