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Can I link my debit card with a savings account?

You won't get a debit card linked to your savings account. An alternative is a bank account that earns interest.

Australians are increasingly using debit cards in favour of credit cards when making everyday transactions. Data from the Australian Payments Clearing Association (APCA) suggests that in 2015, Australians made more than $350 million worth of transactions each month using debit cards, compared to $179.2 million per month spent on credit cards.

However, should debit cards be linked to savings accounts and do Australian banks offer this facility? Because interest is earned on savings accounts, linking it to a debit card may in turn become counterintuitive. One way to get around this is to open an interest-earning transaction account.

Compare bank accounts that earn interest in the table below

Rates last updated October 28th, 2016
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
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
Bank of Sydney EveryDay Saver Account
A unique transaction account that awards you a high interest rate, with all the flexibility of an everyday account.
Visa $0 $1,000 No monthly fee + free unlimited ATM withdrawals from any Bank of Sydney ATM or RediATM in Australia. More
People's Choice Club 55 Account
An everyday transaction account designed for those who are 55 and over.
Visa $0 $0 No monthly admin fee with unlimited free rediATM transactions, EFTPOS transactions, Visa Debit card ‘credit’ purchases, Direct Debits and BPAY® transactions. More
Bank of Melbourne Retirement Access Plus
Sort out your everyday banking when you retire.
Visa $0.50 $0 Free everyday banking using Internet and Phone Banking with BoM - BoM can even show you how to do it. More
Heritage Bank Pension Plus
Eligible if you're at least 55 years old and receiving an Australia gov pension.
Visa $0 $0 Up to 15 free EFTPOS, network ATM withdrawals and balance enquiries per month. More
Bank of Queensland Cash Management Account
Ongoing, variable 1.55% p.a. when you deposit $5,000+ each month. Available on the entire balance.
Visa $0.65 $5,000 A monthly fee applies if your balance falls below $5,000. More
AMP Cash Manager
Ongoing, variable 1.50% p.a. when you link to an AMP Visa debit card and deposit $2,000+ each month. Available on the entire balance.
Visa $0 $2,000 No transaction fees and waived monthly fee when at least $2,000 is deposited. Open More
IMB Cash Management
Ongoing, variable 1.20% p.a. when you link to IMB Visa debit card. Available on balance $250,000 and over.
Visa $0.70 $0 No monthly account keep fee with unlimited fee-free phone and Internet banking. More

Debit cards and savings accounts

A savings account is a crucial banking product for every Australian. It allows the money sitting in your account to earn interest at an advanced rate, helping you grow a little nest egg without much effort. A debit card is another important inclusion in the wallets of many Australians. Typically linked to a transaction account, debit cards allow you to withdraw money from ATMs and pay for purchases in- store using your account balance.

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 10 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, having a debit card linked to your savings account is in most cases counterintuitive. There are some situations where your bank will allow you to access funds in your savings account using a debit card. For example when your cheque account and savings account are linked to the same card. But for the most part, debit cards and savings accounts are kept separate.

The solution: use 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. But there are some accounts available that combine the best features of an everyday transaction account and a savings account.

Sometimes referred to as cash management accounts or high-interest transaction accounts, these accounts offer a wide range of benefits. 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. You can even set up direct debit transfers to schedule automatic payments from your account.

At the same time, you can enjoy the ability to earn interest on your savings balance. While the interest rate is not as high as what you could receive on a high interest savings account, it’s still much better than the interest paid on a standard transaction account.

Interest-earning transaction accounts

Below are some high-interest transaction accounts that feature linked debit cards:

AccountFeaturesSpecial conditions
Bankwest Hero Transaction Account
  • Fee-free access to your cash in store, via online or phone banking, or through a Bankwest or CommBank ATM
  • No monthly account feesEarn2.64%. variable interest on balances up to $5,000 (drops to 0% p.a. for balances above $5,000)Access to Debit MasterCard or Platinum Debit MasterCard
Must deposit at least $2,000 per month to avoid monthly account fees
Beyond Bank Cash Management Account
  • No monthly account-keeping fee
  • Earn interest on your savings – interest is tiered so you earn more interest the more you saveLinked Visa payWave debit card
Interest paid on balances under $5,000 is 0.01% p.a.
Bank of Queensland Cash Management Account
  • No monthly account-keeping fee. Earn 1.55% interest on your savings balanceNo minimum monthly deposit
  • Free access to more than 3,000 ATMs nationwideUnlimited BOQ transactions through rediATM, EFTPOS and chequesVisa debit card with Visa payWave
Must maintain a monthly balance of at least $5000 to avoid account-keeping fees
AMP Cash Manager
  • Access your funds 24/7 with an AMP Visa debit card
  • Fee-free transactions at rediATMs and with EFTPOSInternet accessEarn 1.50% on your balance
  • No monthly account-keeping fee
Must deposit at least $2,000 monthly to waive the $5 monthly account-keeping fee
IMB Cash Management Account
  • No monthly account-keeping fees. Earn 1.20% interest on your account balance
  • Visa debit cardUnlimited free phone and Internet transactions
Minimum opening balance of $5,000

Traps to avoid with high-interest transaction accounts

High-interest transaction accounts can offer a simple and effective solution if you want easy access to your money but the ability to earn a high rate of 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 as competitive as the rate available on a high-interest online 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.

How do I compare high-interest transaction accounts?

Consider the following features when weighing up the pros and cons of high-interest transaction accounts with linked debit cards:

  • Compare the maximum interest rate that you can earn on each account. Does this rate apply at all times or are there certain conditions that need to be satisfied each month?
  • Check the fees. Fees are an important factor when determining the value of any bank account, so check for any monthly service fees, annual debit card fees, transaction fees, ATM withdrawal fees and overseas transaction fees that may apply. Also consider whether any ongoing monthly fees may be waived if you meet a special requirement, such as depositing a minimum amount each month.
  • Compare the ways you can access the funds. Can you make ATM withdrawals, online and phone banking transfers, and set up direct debits? Can you also make EFTPOS purchase and is there any limit on the number of times you can access your account each month?
  • Weigh up the benefits of the debit card you get. Visa and MasterCard are accepted at tens of millions of locations around the world, but if you have a preference for either brand, make sure you choose an account with the right type of card attached.
  • How good or easy is it to use their online banking services? More and more everyday banking transactions can be completed online, so check out reviews of each bank’s Internet banking service and mobile banking app. Online banking that’s simple and convenient to use can save you a lot of time and stress.
  • What kind of customer service do they offer? Make sure the account you choose is offered by a bank with a reputation for providing prompt and helpful customer service, so you know you will be looked after if you ever have a problem.

Linking your debit card to an interest-earning transaction account is a flexible alternative to linking your debit card to a savings account. This solution allows easy access to your funds without taking away from the interest earned on your savings.

Clarizza Fernandez

Clarizza is finder.com.au's assistant publisher for banking and investments. She works to empower consumers in making informed decisions on all things banking and investments. In her spare time, she Googles: 'Sydney's best dog parks' and 'Best pasta Sydney.'

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