Transaction accounts that earn interest

Compare interest bearing transaction accounts

Information verified correct on October 21st, 2016

Enjoy a small boost to your balance with an interest-bearing transaction account.

A transaction account is a day-to-day account that most people use for everyday earning and spending. Unlike a savings account, the goal of a transaction account is not to save, but to allow you to deposit cash and carry out daily transactions, and typically, these accounts do not earn you interest. However,  there are some transaction accounts that let you earn interest on your balance. These interest-bearing transaction accounts can help boost your funds that little bit more.

When determining which interest-bearing transaction account to open, your main considerations should include finding an account with low banking costs and fees. However, there are other factors to take into consideration.

BankSA Sense Everyday Account

Interest Bearing Transaction Account Offer

Save and budget – get two accounts working together and save faster.

  • Ongoing Interest Rate: 1.25% p.a.
  • Monthly Account Fees: $5
  • Minimum Balance: $1
  • Minimum Deposit: $1

    Compare interest-bearing transaction accounts

    Rates last updated October 21st, 2016
    Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee 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
    Bankwest Hero Transaction Account
    Earn a competitive interest rate.
    You can also enjoy unlimited withdrawals and no monthly fees on your everyday money.
    Mastercard $0 $2,000 No monthly account fee when you deposit at least $2,000 per month. More
    Newcastle Permanent Rapid Saver Statement
    Ongoing, variable 2.00% p.a. when you link to a Newcastle Permanent Premium Plus Package. Available on the entire balance.
    Visa $0.50 $0 Receive up to 6 free everyday transactions each month. More

    How does an interest-bearing transaction account work?

    These days, very few people actually carry cash and most rely completely on a debit card for their daily expenses. These daily transactions can result in a hefty amount of bank charges. Interest-bearing transaction accounts can help offset these small bank charges that do eventually add up.

    An interest-bearing transaction account works like a savings account in terms of earning interest. You will earn interest on your balance at a lower rate than the average savings account, but at a higher rate than a normal transaction account. It is important to note that an interest-bearing transaction account does not replace a robust high-interest savings account that should still be used for saving and investing money. Make sure you get the most of your interest-bearing transaction account by adhering to minimum monthly deposits or any limits placed on withdrawals.

    Bank account that earns interest

    A good example of an interest-bearing transaction account is the business interest account from NAB, which earns you interest on every dollar in your account, on a tiered basis. No minimum balance is required but the account is more suitable for lower transaction volumes and higher balances. You can also link your account to their Business Cash Maximiser, which allows you to earn interest on balances higher than $10,000.

    How can you compare interest-bearing transaction accounts?

    First, you need to assess what your needs are, what type of transactions you tend to make and how many transactions you tend to make a month.

    If you make 20 to 30 transactions per month, an account with a flat monthly fee may be your best option. However, if you make more electronic transactions every month and very little other withdrawals or deposits, a pay-per-transaction account will be better.

    Once you have determined the above, you can compare other features like:

    $0 Account-keeping fees

    This will be your monthly service fee to keep the account running. Ask yourself, does this fee offset any interest earned?

    Little to no minimum monthly deposit

    This refers to the above mentioned account-keeping fee. Some accounts such as the Bankwest Hero Transaction Account will waive the account-keeping fee if you deposit an amount of $2,000 monthly.

    No ATM fees

    Ideally you should choose an account that doesn’t charge any ATM fees.

    No branch fees

    Fees charged for making deposits or withdrawals at a bank branch.

    No EFTPOS fees

    Electronic funds transfer fees are charged when you pay with your bank debit or credit card.

    Convenient Internet banking

    Does the account allow you to access your account details online and make transactions?

    Low minimum opening balance

    Different banks have different policies on how much you have to deposit into the account at its initial opening as well as the minimum balance amount that must be kept in the account at all times.

    Competitive interest rates

    The beauty of an interest-bearing transaction account is that you can compare the interest rates offered on your balance. Similar to a savings account, take the time to compare just how much interest you can earn and, more importantly, how the interest is calculated. As a transaction account, constant withdrawals and deposits means your balance will fluctuate, so it’s important to understand when interest is calculated. This means you can manage your account balance and maximise the interest earned.

    Added bonus: rewards and privileges

    Some banks will give you bonus rewards. For example, if you have an HSBC Day to Day Transaction Account your Visa debit card will unlock special rewards with the HSBC Home & Away Privilege Program.

    What are the pros and cons of interest-bearing transaction accounts?


    • Free or cheap transactions. As long as you stick to the guidelines set by the bank, your transactions won’t cost you much.
    • Monthly fees waived. Most accounts will waive monthly fees if you deposit a minimum amount.
    • Rewards or benefits. Some banks will give you extra perks such as cash back rewards.


    • Low-interest rates. Transaction accounts tend to have much lower interest rates than savings accounts.
    • The possibility of paying banking fees on two accounts. You will need to have both a transaction account for daily use and a savings account, which may mean doubling up on fees.
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    What are the risks of an interest-bearing transaction account?

    Whenever you decide to open a bank account, there are a few risks you need to be aware of to ensure you don’t waste or lose any money.

    • Too many needless transactions

    Be aware of the fine print. Many transaction accounts advertise that they have no transaction fees, when in reality this benefit is limited to a number of transactions.

    • Type of transactions

    Electronic payments tend to be included in the free transactions bracket, but over-the-counter transactions and monthly debit orders may have fees attached.

    • Minimum deposit

    Not all accounts require a minimum deposit, but if your account does and you don’t stick to it, penalties may be imposed.

    • International online purchases

    You may be charged extra for international online purchases or for the conversion of the currency.

    Did you have these questions?

    Can I apply for an account online?

    As with most other transaction or basic savings accounts, you can apply online should you be able to supply the necessary legal information.

    Will I earn the same interest as I would with a savings account?

    No, a savings account is still a better option for earning higher interest on balances.

    What are the basic requirements for opening an account?

    Apart from being able to provide legal and personal information, you might need to meet the minimum opening balance criteria and future ongoing balance requirements.

    Is a cheque account the same as a transaction account on PayPal?

    If you want to make a PayPal purchase using your transaction account, you should choose the cheque option.

    Is there a cardless cash option?

    Cardless cash is taking the Australian banking sector by storm with more people wanting their mobile device to be the only thing they have to carry around. At the moment this option is limited to only a few banks with Commonwealth, Westpac, and St.George leading the way.

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