Is the new $100 note, out October, the last update to a banknote we’ll see?

Is the new $100 note, out October, the last update to a banknote we’ll see?

The nation’s central bank has been busy designing and printing a new $100 bill in anticipation of getting them into public wallets, bringing to a close a banknote redesign program decades in the making. 

But the rollout of a redesigned hundred dollar bill -- the last in the series of next generation notes -- comes as the COVID-19 pandemic accelerates the downfall of cash and the public embraces newer payment technologies, according to the nation’s central bank.

New cash for an economy going cashless

About 400 million new $100 notes will be released into circulation from October 29. The Reserve Bank of Australia (RBA) has been printing the notes in preparation since the middle of last year. 

Governor Philip Lowe described the release as a big logistical exercise and said it will take time for the new notes to become widely available.

“Australians should feel proud of our banknotes,” he said, at the time of the unveiling. “They are innovative and contain world-leading security features that keep the banknotes secure.”

The RBA planned the new line of banknotes to keep forgery rates low in a project first started in 2007. The redesigned $100 bill features a clear top-to-bottom window that has a number of security elements including a flying owl and a reversing number ‘100’.

Aussie bank notes 100 RBA

Like the other banknotes in the series, the redesigned $100 bill also has a ‘tactile’ feature to help the vision impaired distinguish between different denominations.

The bill continues to honour Sir John Monash, an engineer, soldier and civic leader; and Dame Nellie Melba, a renowned soprano who performed in Australia, Europe and the USA.

It replaces a banknote introduced as part of a series in 1992; however, the old banknote can still be used to make purchases.

In the next 25 years, will cash still be around?

When the RBA first conducted its Consumer Payment Method survey in 2007, 69 per cent of people used cash to routinely make payments. But that number has dropped in the last dozen years to just 27 per cent -- and experts expect the fall to only hasten. 

The RBA survey -- conducted every three years and documenting about 1100 people’s weekly payment habits -- offers an insight into the declining popularity of cash. The most recent was conducted in October and November 2019, preceding the coronavirus pandemic.

“Australians are continuing to switch to electronic payment methods in preference to cash for their day-to-day transactions,” RBA authors James Caddy, Luc Delaney and Chay Fisher said.

“Debit cards were the most frequently used means of payment in 2019, overtaking cash as the single most commonly used payment method for the first time.”

Overall, debit and credit cards accounted for 63 per cent of payments in 2019, representing an 11 per cent increase since the last report three years earlier.

And the arrival of the coronavirus pandemic is likely to have widened the gap between cash and card, the RBA said. 

“More recently, the switch to electronic payment methods is likely to have accelerated as a result of consumer and merchant responses to COVID-19,” the authors said.

“... ATM withdrawals fell by 49 per cent and 38 per cent respectively from February to April 2020,” before somewhat rebounding in May and June. 

There was one banknote that increased in popularity due to the pandemic. 

“The role of cash as a precautionary store of wealth in times of uncertainty has been evident during the COVID-19 pandemic,” the RBA authors said, “where there was a significant increase in demand for high-denomination banknotes," such as $100 bills.

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Learn more about savings accounts

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.