Which is the best bank in Australia? It may not even be a bank.
What makes a bank ‘the best bank’? Is it the number of products, low rates, a regional touch or all of these things combined. Best is such a subjective term, it all depends on what’s important to you. Think about these points when you’re evaluating banks side by side.
Banks versus nonbanks
We use bank as an umbrella term for financial institutions that offer banking products. There are hundreds of customer owned banking institutions operating in regional communities and big cities all over Australia. There are credit unions, mutual societies, friendly societies, cooperatives to think about as well as small local banks, foreign banks and the Big Four.
What are the pros and cons of banks
- Mainstream banks have more money to develop online banking facilities.
- Large choice of banking products and financial services.
- Large branch and ATM presence.
- Fees can be higher what’s charged to members of community banks.
- Bank customers are customers. Members of community banking institutions own a part of the bank and have a say about how the organisation is run.
What are the pros and cons to customer-owned banking?
- Members benefit from bank profits through lower rates and fees. Customer owned banks can offer lower rates than big banking institutions.
- Limited choice of products.
- Limited branch access.
There’s no loyalty in banking, financial institutions have different strengths
Some banks offer great rates on your deposit, non-banks credit cards are often market leading and online only mortgage lenders can give you a cheap loan, the point is to remember to shop around to get the best deal. Don’t be afraid to use the services of a number of different institutions for your banking and personal finance needs. A little extra time using a comparison service before you apply for a financial product can save you money in fees and interest.Back to top
What do you want as a customer?
Ask yourself what you want as a customer to find yourself the best bank.
- A good rate. Customer owned banking institutions can offer better rates and fees than big banks. Every customer is a part owner and profits benefit members through better rates and lower fees.
- Lot of products. Are you looking for a bank that can offer a wide mix of products such as savings accounts, platinum and rewards credit cards, home loan and personal loan products, or do you want a financial institution that offers fewer products at a lower cost.
Large institutions like the Big Four Australian banks offer products and services that suit a number of different demographics; whereas credit unions and mutuals have fewer products packed with benefits. In some cases it can be cost effective to show customer loyalty. For example, the Commonwealth Bank have a credit card annual fee waiver offer for existing customers.
- A superior online experience. When was the last time you actually went to a bank branch, and what was it for? You can open a bank account online with little, if any, face to face interaction with another person. The institution’s investment in online banking, while not a deal breaker — yet — is becoming increasingly important.
- Decent customer service. Excellent customer service is expected when you visit a branch at any financial institution, but how does the level of service extend to the institution’s call centre team. The Big Four bank call centre staff are based in Australia, international banks have offshore representatives. Some customer owned banks may refer your call to a third party if it’s outside of business hours.
How do I compare the best banks in Australia?
Here are a few ways you can compare different banks and financial institutions. Ask yourself:
- Do they charge monthly fees? Banks and fees and almost synonymous. There are institutions that make low or no fees a point of difference. Online lenders don’t have the overheads of a bricks and mortar bank so they can pass the savings onto consumers.
- How big is it's ATM network? How many places can you withdraw your money for free? Banks and nonbanks have different partnerships and arrangements with other financial institutions. For example, some smaller financial institutions have agreements with rediATM, which is a third party ATM operator in Australia, whereas banks operate their own ATM network, for example St.George bank customers can use Westpac ATMs because St.George is part of the Westpac banking group.
- How superior is their online service? Face to face banking is becoming less common. For example, you can apply for a credit card, make payments and repayments, apply for a credit limit increase or decrease just using the internet. If this is how you do your banking, institutions with an enhanced online experience may appeal to you.
- What other products does the financial institution offer? It can be both convenient and cost effective to hold your loan accounts, everyday banking and savings accounts with the same financial provider. As well as getting a few points off your loan rates and discounted annual fees for credit cards, you can also make instantaneous transfers between accounts.
If you’re not happy with your bank, what’s stopping you from making the switch? Whether it’s monthly fees, transaction fees or credit card or mortgage interest, it’s easier than ever to switch banks get the best deal.