Choosing the best bank account for you

Guide to choosing a bank account

Choosing the best bank account for your needs is easy when you know what to look for. We’ve put together a comprehensive bank accounts guide, so you can compare your savings account and transaction account options.

Types of bank accounts

Savings accounts

Savings bank accounts can be confusing to navigate when you don’t know what to look for. In this section, we’ll help you learn the basics of what a savings account is, how interest works and how to compare savings accounts, so that you can make an informed decision.

What is a savings account?

A savings account is a low-risk investment, which allows you to deposit money you don’t intend to spend any time soon into a bank account that accrues interest. You can use your savings account to stash away money for a rainy day or to work towards a big financial goal like saving for a house deposit – it's up to you!

Depending on the bank you're with, there are multiple types of savings accounts you can choose from, including online savings accounts, bonus savings accounts, child, student and pensioner savings accounts.

When you compare savings accounts, make sure the provider is an authorised deposit-taking institution.

Savings account interest rates

Savings account interest rates differ based on the type of account you take out. Savings accounts usually have conditions that apply to how much interest you’ll get paid. Common conditions may include: 

Minimum deposits: You must put a certain amount of money into your account regularly to earn a particular savings interest rate.

Minimum opening balance: You must put a certain amount of money into your savings account when you open it.

Limited withdrawals: Withdrawing money from your account may reduce the interest you earn.

Minimum account balance: Some savings accounts require you to have a certain amount of money in them before you are paid the best interest rate.

Maximum account balance: Once your balance exceeds a certain amount, you may be paid a different savings interest rate on the remainder or on the whole balance, it depends on the bank’s calculation method.

Promotional or introductory rate: Banks sometimes pay a higher interest rate for the first few months your savings account is open, which then drops down to the standard rate once the honeymoon period is over.

To get the best savings interest rate, a good place to start is checking your account’s terms and conditions match your spending habits and lifestyle.

It’s also important to know that any savings account interest you earn is classed as taxable income.

How to compare savings accounts

With a wide variety of savings accounts available to Australians, you don’t have to settle for the first account you come across. Compare savings accounts to find an account that is a good fit for you! A few things to consider include:

Terms and conditions: When you compare savings account interest rates, make sure there aren’t any terms and conditions that make you ineligible for the best savings interest rate.

Fees: The value and types of fees you can expect a savings account to have vary depending on the bank and account type. A low or no fee bank account won’t charge account keeping fees (if you meet the terms and conditions) but it is worth checking if other fees apply. Examples of typical fees include electronic transaction fees, branch deposit fees, cheque fees, phone service fees, international transaction fees and over-the-counter fees.

Accessibility: Decide whether you need a bank card attached to your savings account, or if you’d prefer a cardless account where you can only move your money using online, phone or in person banking.

Deposit requirements: Some savings accounts require you to regularly deposit a minimum amount of money, or continue to grow your balance, to earn a particular interest rate. Choose an account that aligns with your savings goals.

Customer service: If you like to have the option of calling or visiting your bank, check that your online savings account is with a bank that offers these services. Some banks only offer online services.

What is the best savings account to meet your needs?

Once you know what to look for in a savings account, it’s time to start searching! A few tips for finding the best savings account for your needs include:

Research the bank’s reputation: Industry awards and customer reviews will give you an insight into how satisfied customers are with a bank’s savings accounts, online and in-app experience and customer service.

Compare similar products: If you’re looking for the best high interest savings account for kids, compare products that are designed with children’s saving habits in mind (i.e. no or low minimum monthly deposits) and make sure you research potential tax implications for any interest accrued. 

Read the terms and conditions: Make sure you’re OK with the fees your savings account might incur, withdrawal or deposit requirements and any limits that may apply to your savings account interest rate.

Don’t rely on comparison websites: While comparison websites can give you a quick overview of some savings accounts, it's important to know they don’t show all accounts on the market, which means the best savings account for you might not be listed.

Transaction accounts

When you want to open a transaction account, the choices are seemingly endless! In this section, we’ll explain what transaction accounts are used for, what to look for in a transaction account, and how to compare transaction accounts.

What are transaction accounts?

If you’re wondering what type of bank account is best for everyday transactions, you’re in the right place. Transaction accounts are designed for day-to-day banking, such as getting your wages, paying bills, going shopping and withdrawing cash.

How to compare transaction accounts

It's easy to compare transaction accounts when you know what to look for. You’ll be much closer to getting the best transaction account for your needs if you research important account features such as:

Fees: Some fees to watch out for include monthly account keeping fees, ATM fees, Eftpos fees, contactless payment fees, electronic transaction fees, overdraft charges, service fees, international transaction fees and cheque fees. And don’t forget that no fee accounts sometimes have minimum monthly deposit requirements you must meet to qualify for a fee waiver.

Convenient access: Look for a transaction account that is easy to use anywhere, any time. Features on your wish list can include mobile pay (Apple Pay ™, Google Pay ™ and Samsung Pay*), payID, contactless card payments and a user-friendly internet banking platform or banking app.

ATM network: If you prefer to use cash, find a provider that has a widespread ATM network or that offers low or no ATM withdrawal fees.

Customer service: These days, you can get a completely online transaction account. If being able to call or pop into your bank is important to you, steer clear of online transaction accounts offered by banks that are also online-only.

You can only create a PayID within mobile or internet banking by linking it to an eligible account. Not available on some accounts. Please read the Mobile and Internet Banking Terms and Conditions for more information.

What is the best transaction account for you?

Wondering how to find the best transaction account for your needs? Once you know the features to compare, it’s time to start searching. Get the ball rolling with these tips:

Learn about a bank’s reputation: Get an idea of how happy a bank’s customers are by researching industry awards they’ve received and reading their customer’s online reviews.

Compare similar accounts: If you’re looking for the best everyday transaction account, don't waste your time comparing high interest savings accounts. While the idea of earning interest may be appealing, savings accounts aren’t designed for regular transactions, and your interest could be swallowed up by fees, or not paid due to the terms and conditions.

Read the fine print: Always check out the terms and conditions before you sign up for a new bank account, so you aren’t stung by hidden fees or restrictions on how you can use your account.

Use comparison websites with caution: Comparison sites are a useful tool for getting a side-by-side snapshot of different transaction accounts. However, these sites rarely show all the accounts on the market, so the best transaction account for your needs might not be displayed. 

Term deposits

If you’re looking for a convenient, secure and hands-free investment, term deposits are an option worth considering. In this section, we'll cover term deposit basics, including what term deposits are, how much interest you can earn from a term deposit and how to choose the best term deposit for your needs.

What is a term deposit and how does it work?

Term deposits are a fixed-rate investment option that lets you earn interest on the money you’ve put in your term deposit account.

Once you have set up your term deposit, you can’t touch the money in your term deposit account until the agreed upon investment time (known as the term) has passed, or you may lose some or all the interest you’ve accrued. You may also be charged a fee for early withdrawal and an early withdrawal notice period may apply.

Australian term deposits are covered by the Commonwealth Government guarantee, which applies to deposit balances up to $250,000 per person per authorised-deposit taking institution. For more information, see the Financial Claims Scheme website.

What is a fixed term deposit?

Fixed term deposits offer a fixed interest rate on your investment. This means the interest rate you lock in when you take out your term deposit won’t change until the end of the term.

Fixed term deposit rates can vary depending on the length of the term.

What are term deposit rates?

Term deposits interest rates depend on a number of factors. 

To get an idea of how much interest you can earn from a term deposit, use a term deposit calculator.

How to compare term deposits

When it comes to finding the best term deposit for your needs, comparing term deposit rates is just the beginning! Factors you could consider before opening a term deposit include:

Investment amount: Check to see whether the bank has a minimum amount required to open a term deposit and a maximum amount you can put into a term deposit.

Term options: Term deposits can be held for months or several years. Find a term deposit with a time frame that suits you and don’t forget to check how much the term deposit interest rate changes with the length of the term. Remember, your funds will be locked away for the agreed term of the deposit. Fees, interest adjustments and notice periods may apply if you withdraw your term deposit before maturity. 

Interest rates and payment frequency: The higher the interest rate, the faster your money will grow. When you compare term deposit rates, don't forget to check interest rates and whether your returns will be paid monthly, annually, or at maturity.

Linked accounts: If a provider requires you to set up a linked account to redeem your term deposit to or pay your term deposit interest into, make sure it is a low or no fee bank account.

How to find the best term deposit for you

There is no 'best term deposit'  there’s only the best term deposit for you. Once you know which features to compare, it's time to start exploring your options. A few tips for researching term deposits include:

Research reputation: It’s never been easier to find out what customers really think about their banks. Spend a little time reading online reviews and check to see if the bank you’re considering has won any awards.

Use calculators: Online term deposit calculators are a great way to compare how Australian term deposit rates translate into actual returns. Simply type in the interest rate, the term and the amount you want to invest, and you can see how much money you’ll end up with at the end of your term.

Read the terms and conditions: Even if a bank has the best term deposit rates, you can still lose money if you withdraw your term deposit early. Always read the fine print before you open a term deposit.

Understand comparison websites: While comparison websites may display a range of term deposits, they won’t always show all the term deposits on the market, which means the best term deposit rates available to you may not be listed.

Joint bank accounts

Whether you’re looking for the best bank account for couples or you'd like to open a shared bank account with your housemates, a joint bank account can help you manage finances together.

What is a joint bank account?

A joint bank account is an account that allows you to give multiple account holders the ability to deposit and withdraw money. Depending on how you intend to use the account, you can open a joint transaction account for everyday banking or a joint savings account for putting money towards a mutual goal.

How do joint bank accounts work?

If you’re thinking about opening a joint bank account, you’re probably interested in how account access works.

Joint accounts fall into two categories:

1. Either sign: All account holders can withdraw money from the joint account without needing the other account holders’ permission to do so.
2. Both sign: All withdrawals from the joint account require the permission of all account holders.

Before opening a joint bank account, it’s a good idea to speak with your bank about setting up account access permissions that work for you both.

How to find the best joint bank account for you

There’s no such thing as the best joint bank account, there’s only the best joint bank account for you and the other account holders’ needs.

When you compare joint accounts, make sure you consider:

Access: Discuss who can access the money in the account, make changes to the account and close the joint account.

Fees: Look for joint bank accounts with low or no account keeping, transaction or ATM fees.

Convenience: If you’re comparing joint transaction accounts, keep an eye out for convenient features like mobile pay and payID.

Interest: If you’re comparing joint savings accounts, look for higher interest rates and watch out for introductory rates that drop after a certain period.

You can only create a PayID within mobile or internet banking by linking it to an eligible account. Not available on some accounts. Please read the Mobile and Internet Banking Terms and Conditions for more information.

Business bank accounts

What is a business bank account?

A business bank account allows you to keep track of your business’ incomings and outgoings.

If you’re a sole trader, you might find it easier to track your finances if you open a business account and keep your business finances separate from your personal finances.

If your business is a partnership, company or trust, it may be necessary to open a business bank account for tax purposes.

You can open a business transaction account for your business’ everyday transactions. Or if you want to set cash aside, you can also open a business savings account.

What are business account interest rates

Savings accounts for businesses can earn interest in the same way personal savings accounts accrue interest. Business savings account rates vary depending on which bank you choose and which account you open.

As you compare business bank account rates, make sure you keep an eye out for any terms and conditions that may impact your ability to earn interest, such as:

• Introductory interest rates that drop after a certain period
• Minimum monthly deposits
• Minimum opening balance

How to find the best business account for you

The best business bank account for your needs will depend on what features are important to you and how you want to use your account. When you compare business bank accounts, you could consider:

Account keeping fees: Watch out for business bank accounts that charge low or no account keeping fees but have other hidden fees or skimp on features.

Cash deposit fees: Banks will sometimes charge business customers ‘staff-assisted transaction fees’ for depositing money at a branch. If your business is cash-reliant, you may want to avoid accounts with these fees.

Foreign exchange fees: If your business does a lot of international dealings, compare business bank accounts with low or no foreign exchange fees.

Transfer limits: Watch out for daily transfer limits if your business makes large transactions.

Business services: Don’t forget to compare business bank account support services, as features like accounting software integration could help make your admin easier.

Account purpose: It’s important to compare business accounts designed for your intended use. If you’re looking for the best small business account, don’t waste your time researching accounts designed for large corporations.

Teenager bank accounts

What is the best bank account for teenagers?

When it comes to finding the best bank account for teens, it’s a good idea to shop around. Things to possibly look out for include:

Introductory interest rates: Check to see whether the interest rate on offer will revert to a lower rate after the promotional period is over.

Fees: Find a bank account that charges low or no account keeping fees and keep an eye out for ATM withdrawal fees if you like to use cash.

Minimum deposits: Make sure your pay will meet any minimum monthly deposits required to keep features such as higher interest rates.

Online banking options: Research reviews of internet banking platforms and banking apps to find a user-friendly bank.

Are there debit cards for teens?

The rules around whether a teenager can get a bank card may depend on:

• The applicant’s age (the minimum age varies from bank to bank)
• The bank’s policy on issuing kids and teenagers debit cards
• Whether the card is a standard debit card, a Visa Debit or a Debit Mastercard

To learn more about getting a teenager debit card, contact the bank directly.

Bank fees and bank charges

What fees do banks charge?

When it comes to bank account fees, the fees you’ll pay depend on the bank and the type of account you choose. A few common bank fees to keep an eye out for include:

Account keeping fees: Some banks will charge you a fee simply for having an account with them.

Assistance fees: You may be charged for requesting help over the phone or at your local branch.

ATM fees: Banks can charge you for withdrawing cash from ATMs that are owned by other entities.

Cheque fees: Your bank can charge you for everything from ordering a cheque book, to cheque withdrawals or deposits, stopping cheques and dishonoured cheques. 

Eftpos fees: You may be charged for going over the number of free Eftpos transactions your bank gives you every month.

International currency conversion: This group of fees can include international Eftpos/Visa/Mastercard fees, ATM conversion fees and card use charges.

Temporary overdraft fees: If your bank honours a transaction (such as a direct debit) that your account’s available funds can’t cover, you can be charged a temporary overdraft fee. Similarly, a dishonour fee may apply. 

Business bank account fees: There’s a wide range of business account fees a bank may charge, including monthly fees, international transaction fees, cash deposit fees and more. Check out how to find the best business account for you.

Are there no fee bank accounts?

It is possible to find low or no fee bank accounts. However, before you open a bank account, it’s important to read the fine print as bank fees can still be charged if you don’t meet the account terms and conditions.

Keep an eye out for promotions that offer:

No fee bank accounts: When you see no monthly fee bank accounts, check for conditions you must meet to qualify for fee waivers, such as having to deposit a certain amount into the account each month.

Concession and student offers: Concession card holders, students and young people can sometimes get monthly bank fees waived.

Free ATM withdrawals: If you're searching for banks with no fees for ATM withdrawals, check whether the bank imposes a monthly limit on free ATM withdrawals.

As you compare bank accounts, it’s also a good idea to look at the most common bank fees so you won’t be caught out by unexpected charges.

Bank interest rates

What are bank interest rates?

When people talk about bank interest rates, they’re either referring to the interest rates you pay on a loan or the interest rates you are paid on the money in your savings account.

The saving account rates you’re paid depend on several factors, including:

Your account balance: Depending on the account and the bank, interest rates may be tied to having a minimum or maximum account balance.

Saving and spending habits: Some banks require you to save or spend a particular amount every month to unlock their best savings account interest rate.

Introductory period: Some savings account rates are higher when you first open the account and they drop after the promotional period expires.

Payment frequency: Monthly interest payments can help your savings grow faster than quarterly payments, but only when other factors affecting your savings (e.g. bank interest rates, fees, withdrawals and deposits) remain the same.

Calculation: The interest you earn will also depend on how frequently your interest is calculated (generally this is calculated on daily balances) and the calculation method (whether it is paid on whole balances or stepped rates).

Why do interest rates change?

If you’re wondering, 'How do interest rates work and why do they change?', you probably won’t be surprised to discover that the answer is quite complicated.

The interest rate a savings account attracts depends on a variety of factors, including but not limited to:

• The Official Cash Rate (OCR)
• Lending rates
• Wholesale funding rates
• Supply and demand
• Bank policy

For more information, check out the Reserve Bank of Australia’s guide to bank funding costs and lending rates.

Opening a bank account

What documents could I be asked to supply when I open a bank account?

To open a bank account in Australia, you may be asked to provide a few documents and key pieces of information, including:

• Your basic contact details (e.g phone number and address)
• Your photo identification (e.g passport, driver licence or proof of age card)
• Other identification documents (e.g birth certificate, Medicare card or bank card)
• An accepted document that verifies your identity (e.g a utility bill or rental agreement)
• Personal information that may include your age, account uses and Tax File Number

Not all banks will request all the documents and pieces of information above. You can find information on what to provide on the bank’s website.

Some banks allow you to open a bank account online or over the phone, while others want you to go into their branch to open your account. 

How to open a bank account online

Many banks allow you to open a bank account online. Whether you're interested in setting up accounts with an online bank, accounts with a major bank or accounts with a credit union or mutual bank, the process is usually quite simple:

1. You fill out the bank’s form to apply for a bank account online.
2. You provide your identification to the bank.
3. The bank assesses your form and verifies your identification.
4. If you’re approved, the bank creates your bank account.
5. The bank gives you your account number and internet banking login details (if you've requested online banking facilities).
6. If you’ve requested a bank card, the bank will mail it to you. Or, if you’re with a bank that does digital-only cards, your bank will send you instructions on how to set your digital card up.

The whole online account opening process can take from as little as a few minutes to a few days depending on the bank you choose.

How to open a business bank account

When you want to open a business bank account, you may find the process is not always as straightforward as when you open a bank account for personal use.

This is because the documents you may be asked to supply when you open a business bank account will differ depending on:

The business structure: The bank can ask if you are opening an account for a sole trader, Australian domestic proprietary company, partnership, Australian listed company, regulated trust, unregulated trust, self-managed super fund or association.

Who is opening the account: Only certain people within a business have the authority to open a business bank account. You may be asked to provide proof of your identity and your position in the business.

If you want more information on how to open a business bank account for a particular business structure, how long it takes and how much it costs to open a business account, book an appointment with the bank you’re considering, as they may have a business specialist you can chat with.

How to open a joint bank account

The process for setting up a joint bank account is similar to the process for setting up an individual account, there are just a few extra considerations:

Account authorities: You’ll be asked to nominate who has access to the account and specify whether you want all account holders’ approval to complete actions like withdrawing funds, closing the account or changing account details. You may also be asked to decide who is responsible for repaying funds if your joint account goes into deficit..

Account holder eligibility: Don’t forget that all account holders must meet the bank’s eligibility criteria, which could include minimum age requirements, restrictions on place of residence and ability to provide the required identification and an Australian phone number. 

Branch access: It’s not always possible to open a joint bank account online. If a bank requires you to visit their branch in person to set up a joint account, make sure there’s one located in your city or town.

How many bank accounts should I have?

There are many blogs and articles that claim to reveal the 'perfect' number of bank accounts a person should have, but how many bank accounts you need depends on your individual circumstances.

Some people prefer to keep it simple, with just one transaction account for everyday spending and one savings account to set money aside into.

Others like specific accounts for short, medium or long-term goals as well as accounts for everyday spending and bills.

How many bank accounts can you have?

There is no legal limit to the number of bank accounts you can have, however some banks restrict how many accounts you open with them. Basically, you can open an account at any bank that is willing to 

Is it good to have multiple bank accounts? The answer to that question depends on your individual circumstances and goals. You may want separate bank accounts for spending, saving, business or shared expenses, or you may want to put your money in just one or two accounts. It’s up to you.

How do I change bank accounts?

Moving banks doesn’t have to be stressful or difficult. The basic steps for changing banks may be:

1. Compare bank accounts: Do your research before you switch bank accounts, so that your new account meets your needs.
2. Open the new bank account(s): Get your documents and ID ready then apply for your new bank account.
3. Change your direct debits: Make a list of direct debits currently coming out of your old account and provide the debitors with your new account details. Your old bank may be able to assist you in providing a list of your transaction history or a list of regular direct credits and direct debits. Don’t forget to leave enough money in your old account to cover payments until all your regular payments are established with your new bank.
4. Notify your employer: Provide your new bank account details to your employer so that your pay goes into the right account.
5. Close your old bank account: Say goodbye to your bank by withdrawing or transferring the money out of your account. Then, ask your bank to close your account and safely dispose of your old bank cards.

How to close a bank account

The usual steps to close a bank account are:

1. Update your direct debits and income: Let anyone taking money out of or putting money into your account know your new account details.
2. Empty the account: Make sure that your daily transfer or withdrawal limit won't stop you from taking all your money out when you’re ready to close it down.
3. Contact your bank: Use online banking (if available) or call or visit your bank and ask them to close your bank account. Have your ID handy, as your bank may want to verify your identity.
4. Dispose of your cards: When you close a bank account, you should also destroy any cards linked to the account. Remember to cut through the embossed numbers, the magnetic strip and the chip (making sure it can’t be put back together) and throw the pieces away in different bins.

You may be asked to provide extra documentation or visit your bank in person if:

• You’d like to close a business account
• You want to close an account linked to a deceased estate

Contact your bank for more information on how to close your bank account in these circumstances.

Can you close a bank account online?

Whether you can close your bank account online will depend on the bank you’re with and the type of account you have. Some banks require you to go into a branch and sign a document to close your account, while others offer this service on their online banking platform or app.

If you want to shut down a bank account for a deceased customer or a business, you may have to visit or call your bank.

Your bank’s website should provide you with steps for closing a bank account.

Bank account glossary

Definitions may vary depending on your bank. Check with your bank for specific definitions.

Temporary bank overdraft: A temporary overdraft is a line of credit your bank gives you to pay for transactions that occur when your bank account’s balance is zero. If your bank account has a temporary overdraft facility, you can overdraw your account up to an approved limit. Fees, charges and interest may apply. 

Interest rate: An interest rate is the amount charged to a borrower for a loan, or paid to a depositor on their savings balance, typically expressed as a percentage of the total amount of the loan or savings.

Account keeping fee: An account keeping fee is an annual or monthly fee banks may charge you for holding an account with them.

Fixed interest rate: A fixed interest rate doesn’t change for the period of time agreed. Term deposits offer account holders a fixed interest rate for the term they choose.

Variable interest rate: A variable interest rate is subject to change. Most savings accounts offer account holders a variable interest rate.