Your personal transaction account is where you make deposits and manage your everyday financial needs. Between withdrawing cash, paying bills and transferring money, your transaction account is probably one of the most heavily used bank accounts you have. As such, it's important to understand the features and benefits of the next transaction account you choose to open. If you're thinking of switching banks or assessing your options, find out more about transaction accounts and compare.
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Although some options and features offered by transaction accounts differ between banks, they all serve the same basic purpose: to provide you with various means of accessing your money. This can be done by issuing bank cheques, through branch or ATM withdrawals and debit card purchases. From your transaction account you can:
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
Set up automatic payments where a monthly obligation such as a home loan can be paid directly from the account
As with all accounts, transaction accounts come with its own fees and charges, including fees for services provided by the bank you open an account with. Fees will also depend on the types of features included with the account.
Commonly asked questions about transaction accounts
Q: I’m about to share an account with my partner, are there any considerations? So long as you both trust one another, investing in a joint account as a couple is a good way to save on banking fees and manage the household expenses together. If there are any concerns, you could look into a joint account that requires both signatures on major transactions. Q: How do I cancel a bank cheque? The process may vary slightly by financial institution, but in order to stop payment on a cheque you usually need to report it lost or stolen to your bank. Charges may also apply for this service.
There are different types of transaction accounts available on the market. Each type comes with its own benefits, fees and features. Here are some common bank account types to help you with choosing.
No frills, fee-free account
These bank accounts typically charge no ATM fees for local ATM transactions, no monthly fee and there may be some conditions attached such as depositing your salary per month.Learn more about Fee-free accounts
Boost your Frequent Flyer account by earning Qantas points on eligible purchases on your bank account (Velocity points have not yet been released in Australia) and redeem them for a range of awards.Learn more about Rewards accounts
There's a lot to consider when choosing a transaction account. Now that you understand the difference between the types of bank accounts in the market, here's 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. In order to allow for access to your cash a transaction account will include a debit card that allows for withdrawals at ATMs around Australia. Look at the ATM network of the bank to check how many you will have access to. 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. Some provide you with a debit card that is backed by a major credit card logo. These will allow you to make purchases over the counter, online and over the phone the same way you use cash.
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.
Can I rent an ATM for my business? If so, how?
Yes, there are numerous companies in Australia that allow for you to lease or even buy an ATM for your business. Many work by sharing a percentage of the transaction earnings with you. Alternatively, you can contact an Australian bank, as many will pay you to have their ATM on your premises.
How do I compare banks?
There are several features to consider when weighing up the pros and cons of banks, including:
Your own banking needs
Your current and future financial goals
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 bank 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, RaboBank, ING DIRECT 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.
What is the best account to use overseas?
Hoa is looking for an Australian bank account that meets the following requirements:
Online only (although it’s OK if the bank has physical branches)
Can be accessed without requiring an SMS code
He is currently living overseas and his current bank has moved to a system that requires him to enter an SMS code each time he wants to log in to his account. There are a few options he may want to consider:
Rabobank Online Savings: While a phone is not required as part of its online banking system, you do receive a DigiPass that holds the codes for you to log into your account.
Citibank: Citibank’s iPhone app allows you to generate codes, but you'll need a working Australian phone number to activate this feature. Bonus: Citibank’s Plus account offers fee-free international money transfers.
Where can I deposit a USD cheque and get the best exchange rate?
There are a few options you may want to consider:
Deposit the cheque into your regular transaction account, although you may be hit with a range of fees
Deposit the cheque into a multi-currency account. There will be fees, but you may get a better exchange rate.
How does my foreign income get taxed?
Any foreign income you earn will be taxed and needs to be declared on your tax return. This includes employment income, investment income, business income, pensions and capital gains.
Are there USD accounts that can take USD PayPal Australia withdrawals?
Yes, but you will only be able to withdraw funds to a US bank account in US dollars. This option is not possible for Australian bank accounts.
What should I consider when choosing bank accounts for managing family budgets?
There are many factors to consider when choosing a bank account to manage your family budget. For example, you’ll probably want a joint account that offers minimal transaction fees for the regular bills you have to pay. If you want to use the account to pay for big-ticket purchases such as family holidays, you’ll probably want to be earning some interest on your balance. Of course, being able to access your funds whenever you need is also a must.
I just got my first job and I need a bank account. Who should I sign up with?
The answer to this question depends on your situation. If you have an aggressive savings goal, then you may want to save about 30 to 40% of your salary. If you just want to put away some money, up to 20% is a good rule of thumb.
Why should I get a transaction account?
Money management. A transaction account gives you a secure place to deposit your pay and other income and then manage the way in which it is being spent from one place.
Purchase power. With a debit card that has a credit card logo, you have practically unlimited means of making purchases and withdrawals using the money in your transaction account.
Convenience. If you choose a transaction account that has online banking, you will be able to see your balance daily and manage your spending.
ATM access. With your linked debit card, you can access your funds at an ATM for more flexibility.
What are the risks involved with transaction accounts?
There are certain things you should avoid in using your transaction account that will help you in maximising its benefits:
Fees. Some transaction accounts will have various fees that you should be aware of. Don’t only look for a monthly fee, but check to see how much you are charged for cheque transactions, overseas purchases and teller assistance.
Minimum deposits. There are some accounts that do not require a minimum balance while with others you will have to meet a monthly minimum deposit requirement.
Too many transactions. 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.
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.
More questions, answered. . .
No, these are not interest earning savings accounts, although some do calculate a nominal interest rate on your daily balance.
Different banks have their own networks of ATMs to provide their customers with free transactions. If you go outside of their network, you may be facing a fee. Check first with the bank to see who they are partnered with and which ATMs allow you free transactions. Anyone with an Australian bank account can access one of the Big Four's ATMs for free.
If applicable, you can download the appropriate bank’s app onto your mobile phone and get the same banking features as online banking provides. Check for compatibility with mobile devices as well as the availability of the app.
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.
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