When you open a bank account that offers interest, whether it's a transaction account or a dedicated savings account, you'll probably have to supply the bank with your Tax File Number (TFN).

Your TFN is unique to you and you use it as your personal reference number for all your tax and superannuation functions and purposes. You also need it if you're in receipt of any government benefits, when you're filing your annual tax return and also when you're applying for an Australian Business Number (ABN).

This number stays with you for life, no matter how you change throughout your life - marriage, name changes, identifying as a blue-ringed octopus or just switching jobs - your TFN stays constant.

It's important to keep track of your TFN and to memorise it, or at least keep it secure somewhere, because you'll always need it for something and the chances are your mind will go blank!

Where do I look for my TFN?

If you need your TFN for any reason and you suddenly can't remember it (with so many pin codes, passwords and so on these days, who can keep track?), then you can find it on an income tax notice of assessment from the ATO.

It's displayed on the top right-hand corner of this document. You'll also find it on your payslips and super statements. You might not be at home or at work when you need the number, though, so there are other ways to find it.

Finding your TFN by phone

To find your TFN over the phone, call the Australian Tax Office on 132861 and they'll be able to help you.

Finding your TFN online

Since 2013, many key government services in Australia have been available through myGov, a one-stop portal for things like the ATO, Australian JobSearch, My Health Record, Centrelink and Medicare.

If you own or run a business, you can link your ABN to your myGov account to streamline your tax dealings and so on. Conveniently, you can also see your TFN through your myGov account, so as long as you have the power of the internet beside you, you can find out this crucial information wherever you are.

You need to keep your TFN secure

This number is very important and so you need to make sure it's never found out by the wrong person, who could go on to use it for several kinds of fraud, including identity theft. You shouldn't store it in your mobile phone, on a scrap of paper in your wallet or scribbled down on your family planner that's clearly visible in your hallway...

It's also a bad idea to send your TFN to someone in an email or text message. Even when you're starting out with a new employer, you should supply them with your TFN by filling out a paper declaration form. It might feel a little last-century, but it's safer.

Why do I need to give my bank my TFN when I open an account?

If you have at least one bank account that earns interest for you then that interest becomes part of your assessible income. Of course, you may just have a transaction account that gives you a few dollars each year, but even so, it all has to be reported to the ATO each year.

Withholding your TFN or your exemption certificate means that your bank or ADI will have to deduct Withholding Tax at the highest rate. It'll also apply the Medicare Levy on any accounts that haven't supplied a TFN or the exemption.

More about exemptions

Some individuals and organisations can claim TFN exemptions. These categories include pensioners, account holders who are under 16 years of age and various non-profit organisations. You can check with the ATO to see if you or your organisation is eligible for an exemption.

Joint account holders need to supply their TFNs individually. Even if there's a "primary” account holder or contact person, both parties need to submit their TFNs in order to receive the interest earned in any financial year.

Tax, TFNs and residency

If you weren't resident in Australia during any one financial year and you received any interest from an Australia-based bank account, you'll still have to pay tax on the interest at the non-resident withholding rates.

It's important to report your residency status on your tax return each year and if you're uncertain about it, call the ATO for advice. If you've reported it incorrectly, don't worry, just let the ATO know and they can issue you with an amended notice of assessment.

In short, any interest earned on your bank accounts can be subject to withholding tax if you don't supply your ABN, your TFN or your TFN exemption to your bank. You don't have to give the bank these details but remember that the institution is required by law to withhold the money.

What happens to the money?

Any money that is withheld by the bank is passed onto the ATO.

Is there a minimum amount of interest that is subject to withholding?

Yes. If you're over 16 and you've earned more than $120 in interest in any one financial year then you'll face withholding tax if you don't give the bank your ABN, TFN or exemption.

If you're under 16 then you'll be able to earn up to $420 in interest in any one financial year before you're subject to withholding in the absence of a TFN. If the account is held by a parent or guardian, then this person may supply their TFN. If the account is part of a formal trust then the TFN for the trust can be supplied to the bank instead.

Your bank is also required to withhold the tax if you're a non-resident.

Compare savings accounts from Australia's major banks, credit unions and building societies at InfoChoice.

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.