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 when it comes to 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 October 25th, 2016
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
NAB Classic Banking
Tap and Pay with your Android Phone using NAB Pay.
No minimum deposit required.
Visa $0 $0 No monthly account fees, ever. Free use at over 3,400 NAB and RediATMs Australia wide and $0 overdrawn fees. Open 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 monthly fees. No ATM fees at over 3,000 HSBC, Westpac, St.George, Bank of Melbourne and BankSA ATMs. Open More
AMP Access Account
An everyday transaction account with fee-free banking.
Visa $0 $0 Unlimited fee-free transactions at rediATMs, $0 transaction fees using BankNet, mobile banking and BankPhone. Open More
Rates last updated October 25th, 2016
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
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 No account keeping fees, if you deposit $2,000 per month plus no minimum balance required. No ATM fees when using St.George, Westpac and BankSA ATMs. Open More
Bankwest Qantas Transaction Account
Earn Qantas Points on eligible purchases and on your account balance.
Conditions apply.
Mastercard $0 $2,000 No monthly fees when you deposit at least $2,000 into your account each month. Free access to Bankwest and CommBank ATMs in Australia. No overseas ATM withdrawal fees (charged by Bankwest) though third party fees may apply. Open More
ANZ Access Advantage
Apple Pay now available.
Unlimited transactions at ANZ ATMs, EFTPOS, Internet, Mobile and Phone Banking.
Visa $0 $2,000 No monthly account fee when you deposit at least $2,000 per month. Other fee waivers available based on your personal situation. Open 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 No ATM fees when using St.George, Westpac, BankSA or Bank of Melbourne ATMs in Australia. Deposit at least $2,000 per month and enjoy no monthly service fee. Open More
BankSA Complete Freedom Account
Open one in less than 5 minutes with Cardless Cash available.
Visa $0 $2,000 No monthly account keeping fees when you deposit at least $2,000 in the account each month. Free access to BankSA, St.George, Westpac and Bank of Melbourne ATMs. Open 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 No ATM fees when you use Bank of Melbourne, BankSA, St.George or Westpac ATMs. No monthly fees when you deposit at least $2000 into this account each month. Open More
BankSA Express Freedom Account
Get Cardless Cash, free SMS and email alerts.
Visa $0 $1,000 Avoid ATM fees when using BankSA, St.George, Bank of Melbourne and Westpac ATMs. Avoid the monthly fee if you deposit $1000 into this account each month. Open More
Bank of Melbourne Express Freedom
Get Cardless Cash and PAYG branch and cheque services.
Visa $0 $1,000 No ATM fees when you use Bank of Melbourne, St.George, Westpac and BankSA ATMs. No monthly fees if you deposit $1000 into your account each month. Open More
BankSA Sense Everyday Account
Save and budget – get two accounts working together and save faster.
Visa $0 $2,000 Use over 3000 BankSA, St.George, Bank Of Melbourne and Westpac ATMs in Australia for free. Open More

Shirley Liu

Shirley is finder.com.au's publisher for banking and investments. She is currently studying 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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