Not all transaction accounts are the same …
Every Australian needs a basic everyday transaction banking account. But there is no need to settle for the account offered by the bank you have been with for many years. You might think all basic transaction accounts are pretty much the same but there are big differences between the best accounts in the market and the not-so-good. You don’t need to put up with monthly fees, transaction fees and a zero interest rate. Right now there are accounts on offer that give you all the transaction features and none of the aggravation that you might experience from your existing transaction account. And switching accounts to a new provider might be easier than you think.
How to switch to a new transaction account
Switching transaction banking accounts might seem like a big job because you have associated direct debits and direct credits coming into and going out of your account. You probably even have your salary or wages being deposited into your account each fortnight.
Government banking rules, called ‘Tick and Flick,’ mean that all you need to do is find a new account that suits your needs and your new bank will do all the work of changing all your payments over from your old account.
You open a new account with a new bank, either in branch or online, and the new bank will request a list of all your direct debits and credits from the last 13 months from your old bank. You review the list and tick the payments you want to transfer to your new account. You can then flick the old account and enjoy the benefits of a better banking deal.
How to choose a transaction banking account
A transaction account is a ‘foundation’ banking product that everyone needs to live and participate in society. You will use your transaction account almost every day and you will get to know your bank well so you need to be happy with the deal you are getting. Look for these attributes in a transaction account:
1) Plenty of ways to make transactions
You want to be able to use your money where and when you need it. You want to be able to pay bills using Bpay and send money to other people using the ‘Pay Anyone’ function.
You want an Eftpos card and probably you will want a Visa or Mastercard debit card as well to enable contactless PayWave and Tap and Go payments.
You may want to know how many ATMs you can use for free. And maybe you want a bank account that gives you free access to ATMs near your home or work. You may be surprised to find out that the biggest bank does not offer as many ATMs as some of the smallest credit unions.
2) Good mobile app
Not all mobile phone apps are the same. The best apps have almost as many functions as internet banking while others are still catching up. Some apps allow you to add new payees and transfer money to them, while others don’t. Some apps support mobile PayWave payments. A couple fo the big bank mobile apps have cardless ATM cash withdrawals for those times when you find yourself short of money and without a card.
3) Good internet banking site
You will be using your banking site regularly so you need to be able to understand it and be comfortable with it.
4) Transaction account fees
Many transaction accounts charge monthly account keeping fees. These are among the most disliked banking fees of all. Some transaction accounts charge transaction fees or excess transaction fees if you go over a maximum number of free transactions in the month.
But you don’t need to pay fees on a transaction account because there are plenty of accounts that are completely fee-free. And if you hold a Commonwealth Pensioner Concession Card or a Commonwealth Health Care Card, you will be able to get a fee-free transaction account from almost any bank.
5) Interest rate
Most transaction accounts pay no interest or almost no interest. But there are everyday transaction accounts that do offer a rate that is competitive with savings accounts. So you don’t need to move your money around between accounts to get a reasonable return on your savings.
6) Access to Apple Pay or Android Pay
Depending on which mobile phone you have, you may like to activate contactless payments. Some accounts offer Apple Pay and some offer Android Pay.
Some surprising transaction accounts
If you think all transaction accounts are the same, let us show you just a few that have some surprising features.
National Australia Bank’s NAB Classic Banking account has no monthly account keeping fees, ever.
ING Direct’s Orange Everyday Account refunds all your ATM fees from any ATM in Australia when you deposit at least $1,000 per month.
ANZ Bank’s Access Advantage account offers Apple Pay so you can use your iPhone 6 or later to make payments in-store.
Bankwest’s Qantas Transaction Account gives you Qantas Frequent Flyer points that are based on your bank account balance.
Ubank’s Usaver Ultra is a transaction account that offers a savings account interest rate (currently the base rate is 1.81 per cent and the maximum interest rate is 2.87 per cent).
CUA’s Everyday Account gives you access to Apple Pay and Australia’s biggest ATM network – the FlexiATM network.
Westpac’s Choice account gives you access to cardless cash from a Westpac ATM if you have left your card at home.
You can compare transaction accounts from all of Australia’s major banks and credit unions here.