Mozo guides

How to open a bank account

Man and woman look at bank account options on phone.

Opening a bank account in Australia can be a very simple process. Most often it won’t require hours of filling out complicated paperwork and instead can be done in just a few minutes, either online or in a branch of the bank, mutual bank or credit union in question. 

To make sure you make the right choice though, you may want to spend some time researching what each individual bank account has to offer. Each account will come with different features and eligibility criteria and it is important that you understand these before signing up. Not sure where to start? This step by step guide takes you through what to do when opening a bank account starting from the initial research to making your first transaction.

Important considerations when opening a bank account 

When it comes to opening a bank account, there are plenty of factors to take into consideration. These range from how you are going to be using the bank account to what your own values are. Some things to consider might be:

  • Does the bank have an ADI license? That is an authorised deposit-taking institution license, that would mean up to $250,000 of your money would be backed by the government’s Financial Claims Scheme.
  • Does location matter? If you want the option to visit your bank in person, you may want to check whether there is a branch nearby. Otherwise if internet banking is more your thing, you may contemplate an online bank or neobank.
  • What will you be using the bank account for? Whether you intend to use the bank account on a day-to-day basis or not, may sway your decision as to which transaction account you go with.
  • What extra features are available? More than a few bank accounts come with extra features these days, such as a nifty app, payment reminders and so forth. If this is something you’re looking for, it may be worth taking into consideration.
  • Does the bank itself align with your values? Lastly, the bank’s values may be something else you want to take into consideration. Read our guide to ethical banking in Australia to learn more.

These are just a few ideas as to what you might think about when opening a bank account. Keep reading to see what types of bank accounts are available in Australia and what steps you can take to open an everyday transaction account.

Types of bank accounts available in Australia

There are multiple types of bank accounts available in Australia, each one tailored to different age groups, life stages and situations. Whichever one you choose will depend on a few things including whether you are in full time employment, how old you are and how you intend to use the account. A few bank accounts on offer in Australia right now are:

  • Standard everyday bank accounts
  • Junior bank accounts (usually for under 12s)
  • Youth bank accounts (usually for under 18s)
  • Student bank accounts (generally for people in tertiary education)
  • Pensioner bank accounts (for people who receive a pension)
  • Online bank accounts (bank accounts from fully online banks)
  • Neobank bank accounts (bank accounts from app-based banks)

Options such as youth bank accounts and student bank accounts, will typically come with perks such as an automatic account fee waiver. Although to be eligible for these, you may have to show proof that you are either enrolled in tertiary education or are currently receiving a pension, for example.

What are the steps to opening a bank account?

Step 1: Compare different bank accounts

To find a bank account that works best for you, you will first want to see what’s out there. This means comparing what bank account options are available in Australia right now. Use Mozo’s compare bank accounts page for a quick overview of accounts on offer right now. Our comparison page lists bank accounts available with a number of financial providers, as well as their essential features.

Step 2: Choose a bank account that works for you

When shortlisting bank accounts, it’s important to understand the key features that you should be looking at. For example, bank accounts in Australia don’t tend to come with generous interest rates (often around 0.01%), so it may be pointless to compare accounts based on that metric.*

Features that may be more worthwhile comparing are:

  • Account fee: While some bank accounts do not charge an account keeping fee, others charge around $5 monthly to keep your account open. Although the account fee can often be waived so long as a minimum amount is deposited each month (usually around $2,000). Some banks may also have restrictions on how many transactions can be made fee-free each month. For this reason, you may want to look for an account that allows unlimited free transactions from network ATMs, via EFTPOS, cheque, phone, internet, Bank@Post, BPAY and direct debits.
  • Banking app: Most banks these days have a banking app, where you can view your balance and transaction history. Some come with more or less features than others, for example, spending insights, the ability to set savings goals, payment reminders and so on. Depending on how reliant you are on your smartphone, you may want to search for a banking app with lots of handy features that will help you manage your money.
  • Online banking: As well as the online banking app, you will also want to check what internet banking services financial providers have available. Most major banks in Australia offer online banking services these days, but it is still a good idea to check that you can do things like make payments online, transfer funds, check your statements and sign up for new products and services via your internet banking account.
  • Branch access: If you like to do banking old school, you may want to check that there is a bank branch near to where you live. This is especially important these days, as even big banks are cutting back on their physical bank branches. There are even a number of banks that are based solely online and/or only offer services through a banking app.
  • Debit cards: Next you will want to check whether or not the account comes with a debit card. A debit card is basically a card linked to your account that can be used to make EFTPOS or contactless card payments. 
  • ATM fees: To avoid ATM withdrawal fees, you may want to check what ATMs you can use for free with your bank account card. You may only be able to make fee-free withdrawals from your bank’s own ATMs or ATMs that are part of its network.
  • Overseas access: You may also want to check whether an account has overseas ATM access and what transaction fees apply when withdrawing money while abroad.
  • Bonus offers: Even though you’re unlikely to earn interest with an everyday bank account, some banks do offer ways to make the most out of your funds. These can include earning a higher interest rate on money in a linked savings account, when you make a certain number of transactions each month.

Step 3: Check eligibility criteria

Once you have reviewed the features each bank account has to offer, the next step is to check the eligibility criteria. You want to make sure your application won’t be rejected after all that hard work!

While every bank or financial institution will have its own specific requirements, generally the criteria to be eligible for opening a bank account in Australia are:

  • You must be at least 18 years of age (although many banks also offer bank accounts for kids)
  • You must have an Australian residential address (See below if you’re a migrant looking to open a bank account in Australia)
  • You are applying for personal banking needs. Day to day bank accounts are for individuals, not businesses, trusts or companies

There may be a bit more legwork involved in applying for a bank account, if you are not an Australian citizen or permanent resident. In some cases you may not be able to apply for a bank account online and may instead have to go into a branch to verify your ID. You may also need to supply more ID to meet the full identification requirements.

Step 4: Open a bank account

Got your eye on a particular bank account? To get your application started, you can click the ‘go to site’ button next to the bank account you are interested in, on Mozo’s bank accounts comparison page. This will take you directly to the bank’s website, where you’ll be able to complete an application form. You’ll generally need to provide your contact details and proof of identity, such as a passport, driver’s licence and medicare card.

If you would prefer to open a bank account in person at your local branch, just make sure you bring all the documents you need along, so you don’t need to make another trip.

Step 5: Start using the bank account for everyday transactions and bank deposits

Once your application is approved, your bank account should be available to use. The bank will post you a welcome kit with more information about your account, including things like your linked bank or debit card, PIN and other security codes. Depending on whether you applied online or at a branch, you may need to activate online and mobile banking facilities on the account.    

After you’re all set up, you can use your bank account for the following services:

  • Depositing your salary
  • Withdrawing cash from ATMs
  • Paying for purchases using EFTPOS
  • Setting up direct debit account for paying bills
  • Electronic funds transfers

Want to start comparing bank accounts? Check out the options below, or head to Mozo’s compare bank accounts page.

Compare bank accounts

*If you are interested in earning interest, check out Mozo’s compare high interest savings accounts page.

Tara McCabe
Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.

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