Learn more about account keeping fees in Australia and how you can pay $0 for your monthly account.
Accounting fees don’t need to be a thorn in the flesh. It’s a simple matter of knowing what you’re dealing with and how to get the most out of your fees.
An account keeping fee is a fee charged by an organisation or financial institution in exchange for granting you the benefit of an account within its organisation. It’s important to note that account keeping fees and interest charged or paid is not the same thing.
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The difference between account keeping fees and interest
Interest is a fee charged for the use of another party’s money. It can be either the cost of renting the money, or the income from lending the money. Account keeping fees are charged for maintaining the account you are holding and includes most of the benefits you gain from holding such an account.
When do I pay account keeping fees and why do I need to pay them?
Most account keeping fees will be deducted/charged on a monthly basis. The monthly account keeping fees are automatically charged to your account and the deduction of such a fee will be listed as a condition in a standard contract. These fees cover the cost that the institution needs to incur to maintain this account.
How much are general account keeping fees for some basic banking products?
General account keeping fees differ depending on the bank. Some banks, such as the account keeping fees of NAB, have a policy of not charging a monthly account service fee, overdrawn account fee or over-the-limit credit card fee. See further down in the article for a breakdown in fees on different banks and their financial products.
If the fees are loan specific, a tax claim may be allowed. This will depend on the reason for the loan or what the money of the loan is spent on. A claim will be allowed if the loan was for investment purposes such as cash management accounts, due to the fact that the fee will then relate to earning of interest income. These interest deductions are known as D7 interest deductions. It is important to note a few things regarding the tax claim:
Home loan account keeping fees and related tax consequences
If the fees are loan specific, a tax claim may be allowed. This will depend on the reason for the loan or what the money of the loan is spent on. A claim will be allowed if the loan was for investment purposes such as cash management accounts, due to the fact that the fee will then relate to earning of interest income. These interest deductions are known as D7 interest deductions.
It is important to note a few things regarding the tax claim:
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With what banking products can I save on account keeping fees?
When making the decision of which bank to use, it is important to first calculate how much you can afford to deposit every month. This tends to determine whether you will pay any account keeping fees whatsoever.
Many banks have removed their monthly fees after consumers seriously started questioning what they were paying for. For the best accounts that don’t charge a monthly fee, look at the following on the finder.com.au website:
These accounts also have some other benefits connected to them such as no charge for EFTPOS transactions, internet transfers, withdrawals made in-branch, and the normal no charge for withdrawals made at said bank's own ATM.
Different banks have different methods of determining your monthly fee and when it will be waived. The most noteworthy offers that will save you on monthly fees from the big four are the following.
I want to avoid my monthly fee with one of the big four banks
Below we've listed the conditions to help you avoid monthly fees if you bank with one of the big four.
ANZ Access Advantage account
Will waive your monthly fee if:
- You are under 25, or over 60 years of age
- You are a full-time student at an Australian educational system
- You receive a disability support pension etc.
- You have $50,000 or more in certain of their accounts
Commonwealth Smart Access account
Will waive your monthly fee if:
- You are under 21 years old
- Opened your account after 1 June 2010 and deposit at least $2,000 each calendar month
- Deposit a minimum of $1,000 if you’re between 21 and 24 years old
- You have a balance of $50 000 or more in an eligible contributing account
NAB Classic Banking account
NAB is well-known for its zero monthly account fees policy
Westpac Choice Transaction account
- Your Australian social security benefits need to be paid into this account
- You need to hold a current Pensioners Concession or Health Care card
It is clear that account keeping fees will not be the most substantial fee, with a general fee of $5 to $6 depending on the financial usage situation. But, if you add these fees up and see what they could have done over a couple of years if put into investments, it will surprise you!