How to open a bank account
Opening a bank account in Australia is a very simple process that doesn’t require you to spend hours filling out complicated paperwork. It actually just takes a few minutes and can be done online or at a local branch of a bank, credit union or building society, depending on whatever works best for you.
But to make sure that you’re making the right choice, the one thing that you should be spending some time on is understanding the features and eligibility criteria for different bank accounts. This step by step guide takes you through the different steps involved in opening a bank account starting from the initial research to making your first transaction.
Step 1: Compare different bank accounts
Before you choose the best bank account for storing your money, you’ll need to compare the different bank accounts available. To make sure this is quick and easy, use Mozo’s online comparison table that lists all the bank accounts from different financial providers along with their essential features.
Step 2: Choose the best bank account
For shortlisting the best bank account for your money it’s important to understand the key features that you should be looking at. For instance, bank accounts in Australia don’t offer generous interest rates (usually around 0.01%) so it would be pointless to compare accounts based on that metric. If you’re after a high interest rate, head over to our savings accounts section. But, there are other important features that can help you decide why one account is better than another. Take a look:
While there are a number of bank accounts that come at $0 account fee, some banks charge a monthly fee between $3 to $6 unless you deposit a minimum amount (usually around $2,000) every month. Some banks might have restrictions on the number of transactions you can make in a month before additional charges may be applicable. That’s why, for maximum flexibility, you should look for an account that allows for unlimited free transactions from network ATMs, EFTPOS, cheque, phone, internet, Bank@Post, BPAY and direct debits.
All major Australian banks and financial institutions offer online banking these days but you may want to check what these services include. For example, do they let you make payments, transfer funds, check your statements and sign up for new products and services online? Is there a mobile banking app for payment on the go?
Some online accounts eliminate the need for visiting a bank branch. So if you would rather have the comfort of face to face banking then make sure that your bank account comes with branch access.
Does the bank account come with a debit card? A debit card on the other hand is more like a credit card but uses your savings instead of racking up a bank loan.
All bank accounts let you withdraw cash via ATMs but with some accounts you’ll be charged a fee if you use an ATM that’s not part of the bank’s network.
Another important aspect to consider is whether you’ll have overseas ATM access and the related transaction fees.
Even though your money won’t grow in an everyday bank account, some banks offer ways for you to make the most out of your funds. For instance, some banks have cash back offers on daily transactions under $100 using the tap and go technology, or give you a higher rate for savings if you have a linked account with them.
Step 3: Check eligibility criteria
After you’ve shortlisted the bank account that suits you best, check on the eligibility criteria to make sure your application doesn’t get rejected.
While every bank or financial institution will have it’s 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 banking options 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 requirements. Day to day bank accounts are for individuals and not businesses, trusts or companies
Many banks like the Big 4, will let you apply for a bank account even before you arrive in Australia. You will be able to deposit funds into the account, but you will not be able to make withdrawals until you arrive in Australia and meet the necessary identification requirements.
Step 4: Open a bank account
To apply online, you can hit the ‘go to site’ button on Mozo’s comparison table, which will take you to the bank’s website directly where you’ll be able to complete the application form. You’ll generally need to provide your contact details and proof of identity, such as a copy of your passport or driver’s licence.
If you prefer going over to the branch to open a bank account, then make sure you carry the required documents 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 activated instantly. The bank will mail you a welcome kit with more information about your account including things like your linked bank or debit card, PINs 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