Transaction accounts

What is a transaction account?

Transaction accounts (also known as bank accounts) are used for your everyday spending like paying bills, buying groceries and making deposits into other accounts. They're used for your day-to-day transactions, and come with a debit card that you can use in stores, online or at ATMs.

How does a transaction account work?

Although transaction accounts differ between banks, they all serve the same basic purpose: to provide you with various, easy ways of accessing your money. You can use your linked debit card to access the money in your transaction account to make purchases in shops, through branch or ATM withdrawals and online purchases. You can use your transaction account to:

• Make deposits
• Make bill payments
• Transfer money between your own accounts and to others' accounts
• Withdraw cash from ATMs
• Make purchases at EFTPOS terminals, online and via PayPal
• Make purchases overseas or use overseas ATMs
• Set up automatic payments for things like rent or mortgage payments

Transaction account fees

There are a number of fees and charges you could be faced with when using your transaction account. This dpends on the type of transaction account you have, and how you use it. Some of the main fees include:

How do I compare everyday transaction accounts?

Here are some things to consider when comparing the features.

• Options for accessing your cash. A traditional transaction account will allow for teller-assisted services at a branch and over the phone, while more and more banks are now providing their customers with online banking services as well. Online banking will allow you to view your account, make payments and transfers and set up for recurring monthly payments right from your computer. Also check to see if there is a mobile app available that will make the online bank feature even more convenient.
• What are the monthly fees and charges? Compare monthly account keeping fees along with individual transaction fees. For example, some banks will allow for unlimited transactions at the branch, while others may add a fee if you conduct a transaction with a teller’s assistance.
• Debit card and ATM networks.Look at the ATM network of the bank to check how many you will have access to for free. Check if there is a fee for withdrawing cash at an ATM outside of your banks network. Many banks today will allow anyone to use their ATMs for free, but some still do charge you for this.

• International transactions. Larger banks with an international presence can provide you with certain services while overseas, including cash withdrawals at an ATM. Check the fees for international money transfers, overseas purchases and currency conversion when looking at different transaction accounts.

How do I compare banks?

There are several features to consider when weighing up the pros and cons of banks, including:

• The products and services a bank offers
• The bank’s fees for the transactions you’re likely to conduct regularly
• The ease of use of its internet banking platform
• Whether or not it has a mobile app
• Its branch network and whether it has locations convenient to you
• Its customer support options
• How long it has been in business
• Its reputation among friends, family and other consumers

Thinking about using your transaction account overseas or for online shopping?

Look for an account that can be accessed from overseas and also charges minimal fees when you withdraw funds abroad. Ubank, HSBC, RaboBank, ING and a range of other providers offer online bank accounts that are worth considering; however, keep in mind that you may need an Australian phone number in order to be able to perform certain transactions.

Why should I get a transaction account?

• Easy money management. A transaction account gives you a secure place to deposit your pay and other income and then easily manage the way in which it is being spent from one place.
• Make purchases anywhere.You have practically unlimited means of making purchases and withdrawals using the money in your transaction account; online, in shops and restaurants, at ATMs both overseas and at home.
• Convenience. If you choose a transaction account that has online banking and a mobile banking app, you will be able to see your balance daily and manage your spending wherever you are.
• Access cash easily. With your linked debit card, you can withdraw your money at an ATM or self-serve checkout if you need access to cash.

What are the risks involved with transaction accounts?

There are a few things to be mindful of when using your transaction account:

• Fees. Don’t only look for a monthly fee, but check to see how much you are charged for ATM transactions, overseas purchases and teller assistance in branch.
• Minimum deposits. Some accounts do not require a minimum balance while with others you will have to meet a monthly minimum deposit requirement.

• Transaction restrictions. In some cases you are only allowed a certain number of transactions with a feature, such as ATM withdrawals or teller assistance, before you begin incurring fees for them (this is more common in business transaction accounts).
• Online purchases. Be sure that you understand the fees for purchases made overseas, as in some cases this will relate to online purchases as well. You may be charged extra for making an online purchase originating from abroad or have to pay a percentage of the cost for converting the currency.

Written by

Shirley Liu

Publisher

Shirley Liu is Finder's global program manager. She was previously the publisher for banking and investments and has also written comparisons for energy, money transfers, Uber Eats and many other topics. Shirley has a Master of Commerce and a Bachelor of Media, Journalism and Communications from the University of New South Wales. She is passionate about helping people find the best deal for their needs. See full bio