Looking for a better way to manage your money but don’t know where to begin? From everyday transaction accounts and linked savings accounts to credit cards and personal loans, a little attention to your personal banking services can actually save you a bundle.
While personal banking extends across a wide range of products, in this guide, we’re focusing on your personal bank account and how to get the best value out of it. But for more information on the other products, head over to our banking hub where you’ll find detailed guides and financial tools that can help you manage your funds better.
Key features to look for in a personal bank account
Since a personal bank account deals with your everyday finances and is the account that you’ll need to use most often, it is extremely important that you choose an account that suits your financial requirements as well as goals. Here are some of the key features that you should be looking for before picking a personal bank account:
ATM and debit card.
Your personal bank account should come with an ATM or EFTPOS card, which can be used to access your money at ATMs, EFTPOS machines and for making in-store purchases. Look for a bank account that also offers a linked Debit Card, which lets you make contactless payments. These cards make personal banking simpler by letting you access your money easily without having to go to a branch.
Fee free ATM network.
Make sure your bank account comes with a wide network of fee free ATMs because using out of network ATMs will lead to additional charges for every withdrawal. If you regularly visit the ATM then find a bank that has a large ATM network or get an account that lets you use any ATM fee free.
International money access.
While you can use your ATM card when you’re travelling outside Australia, you will need to pay a price for it. Overseas ATM fees are usually between $3 - $5 for cash withdrawals. Apart from this fee, you’ll also have to pay a foreign exchange commission of about 2%- 3% of the transaction amount.
Most Australian banks pay little or no interest on everyday bank accounts. However, there are some lenders that offer relatively higher interest rates of up to 2.25% as long as you maintain a minimum balance in your bank account. To earn a higher interest of up to 3.50%, it’s a good idea to get a linked savings account, where you can store most of your money.
Online accounts are one of the most useful products for personal banking. They let you access your money, transfer funds, make payments and check your statements all from the tap of a button. Fortunately, all major banks in Australia provide Internet banking facilities and if you’re a digital savvy customer, many banks also have the latest banking technologies such as mobile apps, digital wallets and cardless withdrawals with your smart phone.
If you’re using online banking facilities, you won’t really need to visit a bank branch. But if you prefer face to face banking then check if the bank account you’re about to pick will also provide branch access. Do remember that many banks in Australia charge higher fees for over the counter transactions.
No monthly account fees.
Considering you don’t earn much in terms of interest with an everyday bank account, you should make sure you’re opting for an account that comes with no monthly account fees. You can easily find a personal bank account that charges no extra fee for storing your money using Mozo’s comparison table, which lists any additional charges that are attached. However, you will notice that for no monthly account fee, banks often impose certain conditions such as, you may need to deposit a certain amount of money in the account every month.
Personal banking tips and tricks
Open a linked savings account.
Like we mentioned in the section above, banks don’t pay much interest on everyday transaction accounts because you can access your money at any time. Savings accounts on the other hand encourage you to keep your money stored with the bank by offering you a higher rate of interest for making no or limited withdrawals.
That’s why it makes sense to keep the bulk of your funds in a savings account and then transfer funds across to your bank account as needed. Depending on your financial habits and saving goals, you can opt from a wide range of savings accounts such as online saver accounts, bonus saver accounts, intro rate saver accounts or long term savings accounts. Head over to Mozo’s savings accounts comparison table for a detailed look at all your options.
Keep a check on any additional charges.
If you tend to frequently withdraw money from your bank account, then make sure you’ve opted for a personal account that allows for unlimited transactions. Out of network ATM fees can be as high as $5. A good tip to avoid additional ATM charges, is to withdraw money for free at the checkout when you buy fruit and veggies at Coles, Woolworths or Aldi.
And of course, steer clear from any account that comes with a monthly account fee unless you’re sure you can fulfil the conditions that would waive off the charges.
Set up reminders for bill payments.
Personal banking becomes a lot easier when you can just set up automatic bill payments using direct debits or BPAY. But it’s always a wise idea to be aware of the amount of money going out of your account every month so that you’re not in for a nasty surprise when you see your bank statement.
That’s why we recommend that you set up reminders for direct debits expected every month: circle those credit card payments, energy bills and gym memberships so you don’t wind up with an overdraft fee.
Track your funds.
Personal banking is all about managing and organising your money efficiently. And to get the best value out of any account it is very important to know where most of your money is going. To help you analyse your financial position and make a plan for the future, use Mozo’s free budget calculator.
All you’ll have to do is enter some basic data about your income and expenses and the nifty tool will use the information to give you a better picture on how much money you have and if you’re overspending.
How to apply for a personal bank account
Finding a personal bank account in Australia is extremely easy. Here’s a quick step-by-step guide on how to apply for an everyday transaction account:
Step 1: Compare different providers
Kick off your search by comparing the best bank accounts and their features to decide which one suits your financial needs the best. You can use Mozo’s free online bank accounts comparison table to shortlist the bank accounts that work for you.
For more information, you can also check out our Experts Choice Awards - each year Mozo’s research team crunches the data on Australia’s bank accounts to find out who’s offering the best value accounts. The best accounts are ones with no monthly fee, no EFTPOS transaction or Internet transfer fees, no ATM fees for in-network transactions, no minimum balance requirements and a fee free debit card.
Step 2: Go to site.
After you’ve picked the bank account that you want to apply for, hit the ‘Go to site’ button on the comparison table so you can reach the bank’s website directly. The bank’s website will contain all the relevant information and the next steps to make the application.
Step 3: Go through the eligibility criteria.
Every bank will have its own terms and conditions that you would need to fulfil to be eligible for a bank account. Generally, you need to be an Australian resident for taxation purposes and be at least 18 years of age at the time of application. Don’t worry, if you don’t meet these conditions, you can still apply over the phone or in person at a local branch.
Step 4: Make an application.
If you’re eligible to make an online application for a personal bank account, then you would need to enter your contact details like your name, phone number, email address and an identification document like your birth certificate, driver’s licence or passport.
Once you’ve done this, the bank will either open your account immediately and send you an account number, or in some cases it may take a few days. You will then receive a starter package in mail including a new debit card.