Can I link my debit card with a savings account?
Savings accounts don't come with debit card access, but you can link your savings account to an everyday transaction account with a debit card.
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However, you can easily link your savings account to an everyday transaction account which does offer a free debit card. This way, you can transfer money from your savings account to your transaction account when you need it, and use the debit card to withdraw from your transaction account at ATMs or to make purchases. As well as getting debit card access, linking your savings account to an everyday transaction account might also make you eligible for bonus interest on your savings.
Debit cards and savings accounts
As a general rule, most banks will not offer debit cards linked to savings accounts. The simple reason for this is that savings accounts are designed to help you save money while debit cards are designed to help you spend it.
Many savings accounts place limits on the amount of withdrawals you can make in any given month. You could be limited to a maximum of five or ten transactions per month, and in many cases you are not allowed to withdraw any funds at all. If you break these conditions, you may be charged a fee or you may forfeit your right to earn the maximum interest rate available in any given month.
With this in mind, even if you could link a debit card to your savings, in most cases it'd be counterintuitive to do so.
Benefits of linking your savings account to an everyday transaction account
Instead of looking for a transaction account that also pays interest, or a savings account that comes with a debit card, you could link a separate transaction account to your savings account. Yes, you'll now have two accounts opened, but this has many benefits:
- Debit card access. Everyday transaction accounts come with free debit cards that you can use to access the money in the account in stores, online and at ATMs
- Manage all your money in the one place. By linking your savings account to your everyday transaction account with the same bank, you can keep an eye on your money all in the one place in your mobile banking app or Internet banking.
- Earn more interest. A lot of savings accounts offer bonus interest when you link your account to an everyday transaction account with the same bank.
- Avoid fees. A lot of transaction accounts today have zero account fees and also zero fees to use ATMs.
- Keep your savings untouched. You can use the money in your linked transaction account for day-to-day spending and leave your savings untouched, as it should be.
Compare savings accounts with linked transaction accounts below
Transaction accounts that pay interest
If you want to combine the easy access a debit card provides with the ability to earn interest on your account balance, you might want to look for a transaction account that earns interest. These are common across pension and retirement accounts.
Most transaction accounts don’t allow you to earn any interest and instead focus on easy access to funds and keeping fees to a minimum. However, there are some accounts available that combine the best features of an everyday transaction account and a savings account.
They're sometimes referred to as cash management accounts or high-interest transaction accounts. Just like a regular transaction account they provide minimal ongoing fees, easy access to funds whenever you want and the use of a debit card, while also paying interest. You can even set up direct debit transfers to schedule automatic payments from your account.
However, the interest rate on these accounts is not nearly as high as what you could receive on a high interest savings account. In some cases the interest is also tiered, meaning it's only available on large balances.
Interest-earning transaction accounts
Below are some high-interest transaction accounts that feature linked debit cards:
|Bankwest Hero Transaction Account||Deposit at least $2,000 per month into your account to ensure you don't pay account fees.|
|Beyond Bank Cash Management & Community Account||Interest paid on balances under $5,000 is 0.01% p.a.|
|Bank of Queensland Cash Management Account||Must maintain a monthly balance of at least $1 to avoid account-keeping fees|
|AMP Cash Manager||Must deposit at least $2,000 monthly to waive the $6 monthly account-keeping fee|
|IMB Cash Management Account||Minimum opening balance of $5,000|
The downsides of an interest-earning transaction account
High-interest transaction accounts can offer a simple and effective solution if you want easy access to your money and the ability to earn a interest at the same time. However, there are also a few things you should be wary of before choosing one of these accounts.
The thing to be aware of is that the interest rate you earn on a transaction account will not be nearly as competitive as the rate available on a high-interest savings account. This means your money will not be working as hard as possible for you while it sits in your account.
Next, remember that many cash management accounts come with a range of terms and conditions attached, such as a minimum monthly deposit or a limit on the maximum number of transactions you can perform each month. If you fail to meet these conditions, you may either miss out on the maximum available interest rate or have to pay a monthly account-keeping fee.
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