the mozo blog

Last time I looked at my budget, I checked my bank statements to see how much I spent on bank fees. What jumped out was the $60 I spent in ATM fees in the past year – those “too lazy to walk to my own bank’s ATM” fees. Neither my accountant nor my personal trainer would be happy with that, so today when I went to grab lunch and found myself cashless I thought I’d make the effort.

I walked past Suncorp, Bank of Queensland and Westpac ATMs – and ignored 11 other closer machines in the opposite direction – in search of my nearest rediATM. The rediATM iPhone app tells me it is only 350 meters away, which seems a doddle, but it doesn’t know that pedestrians in Sydney need to make an application to cross the road and must then wait impatiently for a billion cars to pass before they are afforded the luxury. This can take a while.

Of course, when I got there the ATM was broken. (You knew that was coming, didn’t you?) But this was not your usual “This machine is not currently in service” kind of broken. No, I’m talking about the totally-dismantled-and-lying-in-pieces-all-over-the-footpath kind of broken. Innards out one side, screen missing, keypad on the ground, wires all over. According to the ATM technician at work on it, “Somebody head-butted it.”

If you know William Street in Sydney, you’ll know that this is not at all unlikely.

Anyway, it got me thinking about how I might avoid all this shopping around for cash. There are two particularly interesting options. ING’s Orange Everyday account actually rebates the $2 ATM fee from any ATM in the country, as long as you withdraw $200 each time. Or Bankwest’s Zero Transaction Account gives free use of any Big 4 ATM, as long as you deposit $2,000 a month into it. But both of these mean giving up the really good interest rate I get on my current product, and changing the way I manage my money. Another option for me would be to switch to Suncorp, whose ATM is practically next door, but that only works when I’m at Mozo HQ and is of no use at my local shops.

Everyone knows there’s no such thing as a free lunch, and it seems that perhaps there’s no such thing as free lunch money any more, either. Perhaps this is why that guy head-butted the ATM.

Rather than shopping around for cash every week (or hitting your head against a bank wall), ask yourself whether you might be better off spending some time shopping around for the right account. And the right account is different for everyone – which is where Mozo’s bank account comparison tables come in.

ING Direct has just taken the wraps off its new “Orange Everyday” account.  ING Direct have been hinting for a while now that this transaction account would refund fees charged by ATMs when you withdraw your money.  Now the full details have been announced, and the bad news is that the much-anticipated ATM fee refund only applies if you withdraw $200 or more.  According to the latest RBA statistics, the average ATM withdrawal is about $180.  So in looking for the best transaction account, you really need to consider whether the way you use your account matches the conditions each bank has attached to their offering.  Are you happy to jump through their hoop?

If you always take out $200 cash or more, ING’s Orange Everyday account certainly is worth considering:

• ATM fee rebated from any ATM in Australia if you withdraw $200 or more.
• EFTPOS is free, and ING pays you 50c if you withdraw $200 or more as cash out via EFTPOS.  Yes, that’s right: they pay you to take cash out.
• $20 bonus paid on each of your first salary deposit, direct debit and Visa Debit purchase, if you do them before 2 November.
• Interest: none, but you can link to their savings account.

If you always deposit your salary to your transaction account, the BankWest Zero Transaction account may suit:

• ATM fee rebated from any Big 4 (or BankWest) ATM, regardless of the amount.
• EFTPOS is free.
• You must deposit $2000 a month or they’ll transfer you to a different account.
• Interest: none, but you can link to their savings account.

If you keep a few grand in your transaction account, or can’t be bothered transferring to and from a separate savings account, then you might prefer an account that pays some interest rather than worrying about the fees.  For example, the AMP First account pays 4.35% interest, charges $5 a month, and cash is free at nab ATMs, RediATMs and EFTPOS.

And of course if you’d just rather stick with using one bank’s own ATM, most offer an account with no transaction fees for about $4 a month.  Some of these pay a little interest, and some even waive the account fee in certain circumstances.

The move by ING Direct could encourage the major banks to look for new ways to offer fee-free banking, particularly if Brett Morgan, ING Direct’s Executive Director of savings gets his way. “We want to become the Australian consumer’s main bank, their favourite bank; they may bring their whole banking relationship to us”.  It will be interesting to see how many people are happy to do things the ING way.  And it will be interesting to see what other products come out in response, and what sort of conditions are attached.

Compare bank accounts with Mozo.com.au