Opening a Bank Account in Australia
Includes links to banks with no monthly service fee for the first 12 months
If you're going to be living and working in Australia, you will you need a bank account where your employer can deposit your wage and so that you can make international money transfers, pay bills and rent, make payments by credit card and withdraw cash - all without worrying about excessive international banking fees. Opening a bank account in Australia can be done before you leave home or when you arrive.
Your Australian banking options:
- Open an Account from your home country through a travelers company
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- Open an Australian bank account within 6 weeks of your arrival
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- Open an Australian bank account 6 weeks after your arrival
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Open an Australian bank account from your home country through a travelers company
To reduce stress and hassle opening a Bank Account through a travelers company is a popular way to go because they reduce the hassle of dealing with banks and they also help you with other useful things like a Tax File Number (which you need to work) and a Medicare Card (for medical purposes).
Open an account within 6 weeks of your arrival
If you are planning to open an Australian bank account after you arrive, you should open it within six weeks of your arrival as then you will only need your passport as identification.
Open an account 6 weeks after your arrival
If you wait for more than 6 weeks after your arrival in Australia to open a bank account, you will need extra identification such as a birth certificate, driver's licence, credit card or bank card.
- How do I open a bank account in Australia through a travelers company?
- How do I open a bank account in Australia by myself?
- What kind of bank account do I need?
- What kind of fees should I be aware of?
- How can I reduce the bank fees I pay?
- Which bank should I choose?
- How do I move money internationally? (Banks and International Money Transfer Services)
Opening a bank account before you arrive in Australia through the use of a travelers company is a popular way to go because it gives you the extra piece of mind that everything is organized before you leave home. Travelers companies that offer assistance with opening a bank account also usually offer a number of other services as part of a package.
Some of the services often included are:
- Bank Account – Australia
- Tax File Number (requirement for working in Australia)
- Visa Assistance
- Employment Assistance
- Mobile phone SIM cards (very useful)
- Orientation meeting when you arrive
Prices range from about $79 to $900 for these packages, depending on what is included in the package. Higher cost packages often include accommodation for your first couple of days and sometimes guaranteed employment (usually short term, but hey, it's a start)
If you choose to open a bank account (Australia) within six weeks of your arrival you will only need your passport as identification. If you wait more than six weeks after your arrival in Australia to open an account you will need extra identification such as a like a birth certificate, driver's licence, credit card or bank card.
- Day-to-day bank account (Australia)
In Australia, a day-to-day bank account is often called an everyday transaction account (called a current account in the UK). This is the account you would use to do your everyday banking, withdraw cash from ATMs or make payments in retail outlets via EFTPOS using a debit card (also known as a "keycard"). EFTPOS is the electronic payment system. Some everyday accounts will also give you a "Visa Debit" or "Mastercard Debit" card so you can use it to make purchases online or where Visa or Mastercard is accepted.
- Credit account (Australia)
Once you start earning an income in Australia you may be eligible to open a credit account and get a credit card which you can use to pay for items online, by phone or in retail outlets. It may be difficult to get a credit card until you have been living in Australia for a certain amount of time as you may need to prove your credit history and earnings through a credit check.
- High interest savings account (Australia)
If you have any cash leftover after splashing out on travel and fun stuff, you may want to open a high interest savings account. These accounts are ideal for watching your balance grow...if you can keep the urge to withdraw at bay. The higher interest rates on offer (much better than everyday accounts) usually are conditional upon maintaining a minimum balance or making no withdrawals. Ask at the bank where you have your everyday account or search around for the best interest rates. A high interest savings account will not replace a day-to-day account.
If you?re not careful, you can rack up quite a few bank fees in Australia. Most banks charge a variety of fees, so before opening an account you should always be aware of what charges you might have to pay and how you can avoid incurring unnecessary costs. Ask the bank for details.
The four most common types of fees are:
- Account-keeping fees: Most standard accounts in Australia have an account-keeping fee which is around $4-$5AUD per month. There are sometimes smaller and more competitive banks that offer "fee-free" options, which is great if they have ATMs close to you. Some banks waive the fee if you can meet their minimum deposit requirement, which is often a significant amount of cash.
- Transaction fees: While some banks offer you free unlimited transactions, some banks in Australia will charge you a small amount for each transaction you make (depending on which type of account you have). Some accounts give you a "free transaction allowance" per month and then you must pay for any additional transactions. Transaction fees are usually around $0.30-$0.50 per transaction.
- Other ATM fees: In Australia, it's a good idea to use the ATMS belonging to your bank as these transactions are usually free (up to a certain point as many accounts have a maximum monthly transaction limit). If you use an ATM that belongs to another bank you could be charged up to $2 per transaction, which can be a nasty surprise when you get your statement.
- Overdrawn account fee: You may be charged a fee if your account becomes overdrawn (for instance if you have a Direct Debit bill payment set up on your account and there are insufficient funds when the payment is made). This fee could be up to around $35.
Always ask about any fees that may apply to your account and shop around for the best deal.
Here are some quick ideas to reduce the amount of bank fees you might have to pay:
- Make sure you understand what fees you are getting charged. If you get a certain number of free transactions per month, try not to exceed this limit.
- Use 'self-service options' like online or phone banking where possible. If you actually go into a branch you often will be charged an extra fee for the teller's time.
- If you use your debit card to pay by EFTPOS in a supermarket, ask if you can get cash out at the same time. This will only count as one transaction.
- Withdraw cash in larger amounts to reduce the number of times you use ATMs.
- Ensure you maintain the required minimum balance so you don't have to pay ovedraft fees.
The biggest banks in Australia are all Australian-owned and are known as 'The Big Four'. Recently banks have started competing for your business and are offering No monthly fees for the first 12 months.
- Commonwealth Bank (No monthly service fee for the first 12 months)
- National Australia Bank
- Westpac (No monthly service fee for the first 12 months)
Some other banks are Bendigo Bank and Bank of Queensland. Some international banks with a large presence in Australia are HSBC and ING Bank. (ING's offerings are limited to High Interest Savings accounts)
Before choosing a bank, make sure you shop around to find the best deal for you. Here are some initial questions to consider when you’re choosing a bank:
- How many branches and ATMs does the bank have and is there one in your local area? (All the major banks have a strong presence)
- How many options do they have for day-to-day accounts and savings accounts?
- What interest rates do they have on their accounts?
- What is the quality of other products and services you might be interested in, like term deposits, personal loans, overdraft facilities, international money transfers etc?
- What rates and fees does the bank charge?
Until the last few years, you really had no option but to use the bank you kept your money with to send money internationally. This kept fees were high due to lack of efficiency and competition. Fortunately, thanks to the internet, there are a number of great services that can now save you significantly for your international money transfers and even innovations like Borderless which is like having a bank account in many countries!
HOW IT WORKS: Generally you move money online from your bank to the money transfer company's account (this is free, since they are in the same country) then when the money arrives you can choose to wait for the right exchange rate or have them exchange it automatically. This money is then deposited into your specified destination account. 24hr phone or online assistance with currency traders ensures everything runs smoothly.
COST: The fees you pay take the form of an upfront charge ranging from $15 - $30 plus a fee ranging between 0.7% and 2.5% which is based on the "mid-market" exchange rate. Banks tend to charge the upper ranges of these amounts while the specialty money transfer companies tend to charge at the lower end.