BANK ACCOUNTS

Choosing your Bank Account

There are so many types of bank accounts available these days, and the choice seems to growing everyday. The most common bank accounts in Australia are:

• Cheque Account
• Savings Account
• Online Savings Account
• Term Deposits

If you count loan account as a type bank account, then the choice is even bigger. As Australia is a multicultural society, we have also seen foreign currency accounts flourishing in the recent years.

Cheque Account

Cheque account is a popular choice for those require to write regular cheques. But cheque accounts usually have very low or nil interest rate compared to savings accounts.

Savings Account

Savings account is the most popular type of bank account in Australia, and as Internet banking becomes even more popular, it has replaced the significance of cheque account. Savings accounts also pay interest, but this usually depends on how much funds you have in the bank account.

Online Savings Account

Online savings accounts are now very popular, especially amongst Generation Y. They are great savings tools if you do not require regular transactions.

Online savings accounts have been introduced by foreign banks into Australia, and since then, has been one of the fastest growing area in the banking industry.

Online savings account are great for those interested for savings, another great advantage is no fees are payable for online savings account. For transactions, they would require another savings account to connect to it.

Term Deposits

Term deposits are very popular especially in uncertain economic times where the sharemarket has been volatile. Term deposits are being offered by banks and other financial institutions and they have been competing with each other by offering more attractive interest rate bank accounts.

Foreign Currency Account

Foreign currency account is becoming increasingly popular, one because of the multicultural society we have, and another is increasing number of companies and consumers dealing with international markets.

Two types of foreign currency accounts are available in Australia. One is for single foreign currency account, this also includes as a saving account or as a term deposit. Another is multi-currency savings account which allows account holders to transfer accounts into different currencies.

Tips to Choose Bank Accounts

Understand Fees Structure

The more bank accounts you have, the higher the banking fees you may have to pay. There are standard monthly account keeping fees, transaction fees, under minimum limit fees, additional transaction fees, over the counter fees and also statement producing fees.

Internet Banking Facility

Internet banking can save you a lot of time and cost, ensure your account has a good Internet banking facility which also has a BPay facility for to you to manage transactions easily.

Interest Rate

Another important feature if you intend to earn extra money from your accounts. Assess between how often you will make transactions on this account and the minimum amount you will deposit in the account, and choose between online savings account or term deposits.

Banks or non-banks?

Some of the more competitive bank accounts are all offered by banks outside the top 4 banks in Australia. They include credit unions, building societies, international banks. Some regional banks or building societies have attractive bank accounts that are also intended to capture consumers in the major cities.

Access to ATM

ATM access is another factor when choosing your bank account, use of inter-bank ATMs can also attract additional transaction fees.

Do you need a branch?

Bank branches are declining, one common fee associated with bank accounts is over the counter fees, fees can be $5 to $10 if you need to make enquiries about your bank account with bank tellers, beware of these fees.

Account Keeping Fees

Account keeping fees have been frequently overlooked by account holders. These fees include a monthly fee, but many banks also charge additional fees if you request for bank statements to be produced, if you apply for additional credit card or if your balance falls below certain amount in your account.

Link Bank Accounts

If you have existing bank accounts with a bank, sometimes you can open up more accounts with more competitive interest rates. If you are a major customer, or if you have larger amount of loans with a bank, you can also negotiate better terms for your accounts such as waiving the account keeping fees or free transaction fees.

When comes to choosing your bank account, also look for alternative options. Many foreign banks have competitive online savings and high interest rate savings or term deposit accounts, but will only have minimal number of ATMs, and this can add up to additional transaction costs.

If you are a regular overseas traveler, check if your bank accounts can be accessed globally through ATMs, this is a fast way to withdraw cash while overseas instead of relying on traveler checks or foreign exchange counters.

Compare bank accounts on Internet and check if there are special deals especially for online savings accounts, which often offer special deals like bonus interest or free cash if you join online.