Low fee bank accounts: reducing costs

Finding the lowest-fee bank account depends on your banking habits: do you make lots of small transactions in a month, or a few larger ones? Do you like to do your banking via internet and telephone banking, or are you more comfortable with automated teller machines (ATMs) and EFTPOS? Do you prefer to visit a branch and deal with a person face to face? Do you need a cheque book linked to your account? Once you’ve decided what features you use most regularly, check the fees associated with those activities.

If you don’t mind performing most transactions electronically, there are some good products available, with low or even no monthly account keeping fees. However, it’s best to check the finer details to make sure of any extra fees tacked on to low-fee products. Over-the-counter service fees, other-institution ATM fees and charges for transactions over a set monthly amount may apply. It is worth considering also that low fee accounts will generally have a very low interest rate to match.

Basic Bank Accounts for Pensioners and low-income earners

Many banks and credit unions offer “basic” accounts aimed at pensioners, low-income earners and welfare recipients. These accounts will often have very low or no monthly account keeping fees and little or no interest. Some banks require you to provide your Centrelink or Veterans Affairs number to be eligible. Be aware that many basic bank accounts will offer a limited number of free transactions and you may be charged for any extras. Many accounts do not have a cheque book facility also.

Personal transaction accounts

Personal transaction accounts are standard everyday accounts, and nearly all banks and credit unions offer some form of transaction account. The fee structures for transaction accounts are either a flat monthly fee that covers all transactions, a pay-per-transaction model, or a mixture of both. To decide which model is best for you, you need to assess how many of each type of transaction you make each month, including:

• ATM withdrawals and deposits
• Other-institution ATM transactions (each costing up to $2.50)
• Direct debit
• B-Pay
• Cheques
• EFTPOS
• Over-the-counter assisted withdrawals and deposits

Once you’ve worked out your transaction habits, look for an account that lets you make that number of transactions a month as part of the standard monthly fee.

Tips for avoiding bank fees

• Look out for deals to waive or reduce the monthly account keeping fee, for example if you are a student, or if you have another product (such as a mortgage) with the same institution, or if you maintain a minimum monthly balance
• Look at the credit union or building society option – there are many more bank accounts available than those provided by the big five banks. Some credit unions consistently beat banks in terms of low monthly fees
• Reduce the number of transactions you make each month – if you find yourself paying for extra transactions try withdrawing cash at the same time as making an EFTPOS purchase. If you’re still getting excess transaction charges it might be time to find an account with an unlimited number of electronic transactions included

Whether using a bank or a building society, there are various options for low fee bank accounts. Firstly consider your banking transaction habits and then see if a potential deal can be uncovered.

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