Choose an account

Step 1 - Assess your needs

Think about what you want from day to day banking and look for an account that reflects that without incurring additional fees.

Transaction accounts are useful as a high-volume of activity account. That is, you can deposit your salary, withdraw cash and pay bills as frequently as you need to. Interest earned may be minimal at best.

Savings accounts offer a higher interest rate but may have a minimum balance requirement and may only allow limited withdrawals.

Once you have decided on the type of account, consider whether you need a local bank branch or whether you are comfortable transacting via an ATM or online. Overall the key is to choose an account and method of transacting that suits your needs.

Recently the banking sector has gone through a big shake-up in terms of fees and happily for customers, fee-free transaction and savings accounts are now the norm rather than the exception.

Not all accounts are fee-free though so it’s important to find out exactly what you may be charged. Examples of some potential fees include:

• Monthly account keeping fee
• Overdrawn fee or dishonour penalty fee
• Fee for using the ATM
• Internet banking fees
• Branch deposits and withdrawals

Additionally, some accounts may require you to keep a minimum balance or make minimum regular deposits in order to avoid fees.

Use an online comparison site such as ratecity.com.au to compare fees across banks and accounts.

Step 3 - Ask about packages

Banks value and are often happy to reward customer loyalty (or “customer entanglement”). Some banks will waive fees and/or provide better interest rates if you have several products with them, or even if you simply do a lot of business with them.

Home loans, credit cards, other deposit accounts, superannuation accounts, motor vehicle, home and contents and personal insurance are all products that potentially be packaged in order to reduce fees. Discuss what options might be available with your bank.

Step 4 – Check the details

While the account may broadly suit your needs, as a few rather more detailed questions before you sign on the dotted line; questions such as:

• What level of ATM access is available?
• What fees will be charged for overdrawing the account?
• Are there any BPay or eftpos fees?
• Can a chequebook be linked?
• Is there any limit on transactions per month?

Step 5 – Don't be afraid to change

Banking is a competitive industry and new banking products are release onto the market every month. So make sure that you review your bank accounts each year by doing a quick comparison at ratecity.com.au and if there is a much better deal available, don’t be afraid to change!