Linking your debit card and transaction account lets you take advantage of the convenience and practical benefits.
Chances are that if you maintain a transaction account with a bank, you also have a debit card with them. Debit cards are very convenient and incredibly useful in day-to-day transactions. Unlike credit cards there are no requirements of credit records and verification, which makes it much easier for the bank to track such an account.
When a debit card is linked to your transaction account, all the funds spent using your debit card takes it directly out of your transaction account. Since your using your own money, you don't need to worry about getting into debt or paying interest on an outstanding balance.
A debit card also provides you with convenience – many retailers in Australia hold an EFTPOS machine where you can swipe your card to make an electronic purchase. This saves you from the effort of having to find an ATM to withdraw your funds from.
What about linking my debit card to my home loan offset account?
While you could use a debit card with a transaction account, it makes much more sense to have them in conjunction with offset accounts, particularly if you also happen to have a mortgage outstanding. Offset accounts are a special type of savings account, where the balance you keep in the account can be used to offset against your mortgage balance. This means that you pay less interest on your mortgage as your balance is reduced, while enjoying the interest earned from your savings, and the freedom to withdraw money from it as well.
While typical mortgage accounts do let you withdraw money from them through redraw facilities, they have numerous restrictions in place, and can even place penalties and fines on withdrawals. Offset accounts do not suffer from the same restrictions, which is why you should use your debit card in conjunction with a savings account that allows offsetting benefits.