Will Australian bank accounts ever be as expensive-250

Will Australian bank accounts ever be as expensive as American bank accounts?

The average monthly fee for a bank account in America is $12.50. That’s a total of $150 per year gone to fees.

In September 2015, the Economist reported that about 8% of American households didn’t have bank accounts in 2013. Half claimed that it was too expensive. Financial services were said to be the culprit. Minimum monthly balances, high monthly fees, and unexpected fees were reasons for this perspective. In 2015, the Federal Deposit Insurance Corporation also released a report that stated about another 20% (24.8 million) of U.S. households were underbanked in 2013. This means they had bank accounts but sought other financial services to avoid the cost of banking. These numbers were predicted to rise.

Two of the reasons for not banking, came to not having enough money and feeling that account fees were too high and unpredictable. These made up 49% of the total reasons according to the report.

Why are American bank accounts so expensive?

After the 2009 Global Financial Crisis, banks tightened up lending. This meant that it made less money on traditional loans such as mortgages. Instead, American banks turned to bank account fees to make up for the difference.

Will banks accounts become too expensive in Australia?

According to Smart Company, Australian banks performed well since 2012 and even achieved more worth at one stage than the entire European banking sector. But news reports since 2014 are putting pressure on banks.

This can influence the prices Aussies have to pay for bank accounts. Commodity prices have been taking sharp plunges, there are tighter lending standards and international investing into Australia has become more expensive. These combined factors mean banks are facing rising expenses.

Bloomberg reported earlier in 2016 that, "Australian bank bonds haven’t been this expensive to insure, compared to U.S. financial debt in more than a decade." Along with that, Westpac disclosed in an email that “[t]he industry is facing a lot of pressure with significant increases in wholesale funding costs and increased capital”.

It is possible that Aussies will see higher margins than before on their banking account costs. This won't necessarily mean bank accounts will become too expensive, but definitely more expensive than in the past.

How American and Australian banks compare to each other in terms of cost

Although there are banks in the United States that offer free accounts, these tend to be local smaller banks with less national and international infrastructure. Many of them also require big opening balances. These can include banks like Ally Bank, EverBank, First National Bank of Omaha, and Colorado Federal Savings Bank as examples.

Bigger banks, such as Bank of America, charges a $14 monthly maintenance fee for a regular checking account. This means $168 in fees gone to the bank.

There are a handful of bank accounts in Australia that don’t have monthly fee no matter what. Most will require that you meet a monthly minimum deposit to get the $0 monthly fee.

Compare fee-free bank accounts in the table below

Rates last updated May 23rd, 2017
$
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
ING DIRECT Orange Everyday Account
$75 cash bonus & Apple Pay available.
Get a competitive ongoing variable rate when linked with an ING Direct Savings Maximiser.
Visa $0 $1,000 $0 monthly account keeping fees. Unlimited free withdrawals at any ATM in Australia if you deposit $1,000 each month. Go to site More
NAB Classic Banking
$0 monthly account fees.
Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
Visa $0 $0 $0 account keeping fees with no deposit conditions. Unlimited free withdrawals at NAB and rediATMs. Go to site More
HSBC Day to Day Transaction Account
Your Visa debit card unlocks special privileges worldwide with the HSBC home&Away Privilege Program.
Visa $0 $0 $0 account keeping fees. Unlimited free withdrawals at over 3,000 HSBC, Westpac, St.George, Bank of Melbourne and BankSA ATMs. Go to site More
Rates last updated May 23rd, 2017
$
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
NAB Classic Banking
$0 monthly account fees.
Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
Visa $0 $0 $0 account keeping fees with no deposit conditions. Unlimited free withdrawals at NAB and rediATMs. Go to site More
St.George Complete Freedom Account
10% Cash back for online gaming purchases.
Waived account keeping fees when minimum deposit is met with no minimum balance.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 fee applies. Unlimited free withdrawals at St.George, Westpac and BankSA ATMs. Go to site More
ING DIRECT Orange Everyday Account
$75 cash bonus & Apple Pay available.
Get a competitive ongoing variable rate when linked with an ING Direct Savings Maximiser.
Visa $0 $1,000 $0 monthly account keeping fees. Unlimited free withdrawals at any ATM in Australia if you deposit $1,000 each month. Go to site More
Bankwest Qantas Transaction Account
Earn Qantas Points on eligible purchases and on your account balance.
Conditions apply.
Mastercard $0 $2,000 $0 account keeping fees when you deposit at least $2,000 into your account each month. Otherwise, a $6 monthly fee applies. Unlimited Free withdrawals at Bankwest and CommBank ATMs in Australia. Go to site More
ANZ Access Advantage
Apple Pay, Android Pay & ANZ Mobile Pay.
Take advantage of Apple Pay by linking your ANZ Visa Debit card to an eligible iPhone and seamlessly pay for purchases with your phone.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at ANZ ATMs. Go to site More
Westpac Choice
$0 ATM withdrawal fee at 50,000+ ATMs globally.
Via Westpac's Global ATM Alliance. Get Cash without your debit card (conditions apply).
Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at St.George, Westpac, Bank of Melbourne and BankSA ATMs. Go to site More
BankSA Complete Freedom Account
Open one in less than 5 minutes with Cardless Cash available.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at BankSA, St.George, Westpac and Bank of Melbourne ATMs. Go to site More
Bank of Melbourne Complete Freedom
Get Cardless cash and shop securely with your Visa debit card. Customise SMS and email alerts.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at Bank of Melbourne, St.George, Westpac and BankSA ATMs. Go to site More
BankSA Express Freedom Account
Get Cardless Cash, free SMS and email alerts.
Visa $0 $1,000 $0 account keeping fees when you deposit at least $1,000 into your account each month. Otherwise, a $3 monthly fee applies. Unlimited Free withdrawals at BankSA, St.George, Bank of Melbourne and Westpac ATMs. Go to site More
Bank of Melbourne Express Freedom
Get Cardless Cash and PAYG branch and cheque services.
Visa $0 $1,000 $0 account keeping fees if you deposit at least $1,000 per month. Otherwise, a $3 monthly fee applies. Unlimited free withdrawals at BankSA, St.George, Westpac and Bank of Melbourne ATMs. Go to site More

Shirley Liu

Shirley is finder.com.au's publisher for banking and investments. She has completed a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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