How To Find The Best Bank Account in 2020

One of the key takeaways from Scott Pape’s The Barefoot Investor is not to pay any bank fees, admin fees, and any fees that you can avoid – because that’s the only thing you can control.

The only criteria in finding the best bank – charges NO FEES. Full stop.

Bank Fees

What are the usual bank fees that you’ll get charged of? These exclude home loans and credit card fees. These are exclusively for your bank transaction accounts:

Account-keeping fees

Your bank (mostly one of the Big 4 Banks) charges you money for merely keeping your money on hand. Of the big four banks, only NAB offers an account with no monthly fee without conditions. ANZ, CBA and Westpac all require a minimum deposit:

  • NAB Classic Banking Account, no monthly fee
  • ANZ Access Advantage, $5 monthly fee (waived if you deposit a minimum of $2000 per month, are under 25 or a student)
  • Commonwealth Bank Everyday Smart Access account, $4 monthly fee (waived if you deposit a minimum of $2000 per month). A monthly account fee waiver will also apply if you’re under 25 years of age or a full-time or part-time tertiary student at an Australian educational institution or undertaking an Australian Apprenticeship.
  • Commonwealth Bank Smart Access, $4 monthly fee (waived if you deposit a minimum of $2000 per month). A fee also waived if you deposit at least $1,000 per month and for those under 21 or on Student Options.
  • Westpac Choice, $5 monthly fee (waived if you deposit a minimum of $2000 per month). A fee also waived for people under 21, full-time tertiary students, pensioner concession or health care card holders, new migrants or returning residents for the first 12 months.

There are quite a few bank accounts that HAS NO account-keeping fees:

  • Suncorp Everyday Options
  • MyState Bank Glide Account
  • UBank Ultra Transaction Account
  • ING Orange Everyday
  • HSBC Everyday Global Account
  • Citibank Global Currency Account
  • Xinja Bank Account

Check Bank account comparisons on Mozo.

ATM Withdrawal Fees

The big banks have axed the $2 withdrawal fees if customers use other bank’s ATM. This is good news and we’re now living in an era of NO ATM WITHDRAWAL FEES.

Though not all banks are doing this. Bankwest is still charging $2.50 if you withdraw money from a Bankwest ATM inside the 7/11 store. Bendigo Bank charges $2.50 if not using a Suncorp ATM machine. Where the heck you can find a Suncorp ATM machine anyway?

Finder has a list of all Australian Bank ATM fees charges.

Overseas ATM Withdrawal Fees

If you’re making an ATM withdrawal overseas additional fees may apply, and can also grow to include a currency exchange fee.

  • Commonwealth Bank: For CBA customers there’s a $2 fee per overseas transaction when using a Commonwealth Bank ATM, and a 3% exchange fee when withdrawing foreign currencies. When using another ATM, this fee is a $5 fee.
  • ANZ Bank: $5 for overseas non-network ATMs, but only a flat $4 fee for foreign currency withdrawals at select ATMs.
  • NAB: $5 per withdrawal, $1 per enquiry and a 3% foreign currency withdrawal fee apply for overseas ATM transactions.

Overdrawn Fees

Did it happen to you when you checked your bank account and it has a negative balance? It is not because you’re a great spender but because all your direct debits come in while your funds or income haven’t. It happened to me twice and I got a notification from my bank plus a whooping overdraft fee of $10.

Overdraft or overdrawn fees are a charge applied by your bank (usually the big banks) when you spend more money than your balance in your transaction account. Not all banks charge overdrawn fees, and not all banks will let you overdraw your account. If your bank does let you overdraw from your account, definitely there is a cost for it.

Amount the Big 4 Banks, only NAB does not charge a fee if you overdraw your transaction account. CBA and Westpac may allow you to spend more money but will charge you an overdrawn fee.

  • NAB – $0
  • ANZ – $6 daily (each day overdrawn by more than $50)
  • CBA – $10 daily
  • Westpac – $15

Currency Conversion Fee

The majority of accounts available will charge a fee of about 3% if you make an EFTPOS purchase outside Australia. This includes overseas online purchases.

This one is a bummer, really. I bought something online and got charged with 3%. I was notified by the seller that the item is out of stock and refunded what I paid. But 3% was not refunded.

How do I check on bank fees?

Financial institutions like banks have a responsibility to disclose everything they’re charging their customers. However, they are made to confuse you with high-falutin jargons. All information can be found in Product Disclosure Statement (PDS).

If after reading the PDS and literally feel a little dizzy, you can give your bank a call and ask some questions. I will give you a checklist of what to ask.

How do I check on penalty fees?

Penalty fees are different. You cannot avoid these by changing your bank. Penalty fees – fees you will get charged because you are at fault, either delayed payment or overdrawn money.

To avoid penalty fees, check the direct debit fee schedules and make sure that they are in line with when you’re income or payslip will get credited. When we bought a car couple of years ago, we specified that the direct debit of fortnight payment in line with my husband’s pay day.

Banking Checklist

So what you should look for a bank account?

  • No-monthly-fees with no conditions attached, such as a minimum monthly deposit or balance.
  • Unlimited, unconditional free own-bank ATM and EFTPOS transactions.
  • A range of other unlimited transactions at no cost, including direct debit or credit, phone and internet banking, BPAY service and over-the-counter service if available.
  • Transaction accounts should be linkable to a savings account with a reasonable interest rate (the arrangement is sometimes called a cash management account), and you should be able to transfer money back and forth between the accounts via the internet as often as you like at no charge.

Aussie Money Blog’s two cents

Finding or choosing your bank account shouldn’t be taxing. The main goal is to find a bank that won’t charge you just because you missed keeping your money on it. It is a transaction account – which means that the money will come in and out of it. Good banking shouldn’t charge you because you’re using it for what’s it for.

If you can avoid those bank fees because you’re meeting bank’s conditions, you don’t have to worry about it.

I personally use CBA as my transaction account and ING for my savings account. But I think, after writing this – I will probably switch to NAB (.. because to them, it is more than money), knowing that they pretty much charges NO FEES if you bank with them.