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What is a transaction account?

A transaction account is an everyday account used to manage your finances. You can deposit your income, and withdraw money to spend it on the things you need in a variety of ways:

  • Debit card (EFTPOS, payWave/PayPass)
  • Electronic payments and online shopping
  • Digital wallet (e.g. Google Wallet, Samsung Pay, Apple Pay)
  • ATMs
  • Direct debit
  • Bpay
  • Branch access
  • Cheques

Transaction accounts are useful for just about everyone. You can compare transaction accounts on our website.

Businesses also need a good transaction account, so business owners can compare business transaction accounts on our website.

How Canstar compares transaction accounts

CANSTAR compares hundreds of transaction accounts from 75 different institutions under the research microscope every year. We use a sophisticated methodology to compare transaction accounts and present our findings in an easy-to-use star ratings system.

Our 5-star ratings are awarded to transaction account products that offer outstanding value in different customer profiles. To see which products received a 5-star rating, compare transaction accounts on our website using the comparison selector tool at the top of this page, or read our latest star ratings report.

There are a few basic things to look for in a transaction account, depending on your financial needs:

  1. High interest rate so you can save while you spend (but beware of high introductory rates that revert to lower rates)
  2. Low account-keeping fees
  3. Access to suit your spending habits
  4. Free transactions and ATM withdrawals
  5. Suitable minimum or maximum deposit amounts
  6. Accessibility of branches and ATMs if necessary

Being able to use your money in many transactions involves paying fees. Some of the more common fees you will encounter include:

  • Monthly account-keeping fees
  • EFTPOS transaction fees
  • Electronic transaction fees such as BPAY fee
  • ATM withdrawal fees from your own bank and other banks
  • Branch cash deposit or withdrawal fees
  • Cheque deposit and withdrawal fees

Surcharges are another matter entirely. ‘Tap and go’ card systems including MasterCard PayPass or Visa payWave are faster, easier ways to make purchases under $100 without entering a PIN, but these systems often come with an extra cost in the form of a surcharge. You can usually avoid paying these surcharges by inserting your card and selecting the ‘Savings’ or ‘Cheque’ option instead of using payWave or PayPass.

See how your current institution stacks up with what is available on the market, and switch if you’re not satisfied.

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Written by: TJ Ryan

Transaction Account Glossary Of Terms

Please note that these are a general explanation of the meaning of terms used in relation to transaction accounts. Your bank or financial institution may use different terms, and you should read the product disclosure statement (PDS) carefully to understand everything that may apply to your account. You cannot rely on these terms in relation to any transaction account you may purchase.

Account-keeping fee or administration fee: An ongoing fee charged to cover the lender’s administration costs for creating and maintaining the account. Usually charged monthly.

Annual equivalent rate (AER): A rate that can be compared between lenders. Any advertisement for a savings product that quotes an interest rate must also quote the AER so that you can compare the return you might expect over time with other products.

At call: “At call” transaction accounts or savings accounts allow you to immediately withdraw your money from the account whenever you like.

Balance: The amount of money available in your transaction account.

Cheque account or checking account: A transaction account that allows you to make payments with your own money by writing cheques. If you do not have enough money in your account when the recipient cashes your cheque, the cheque will “bounce”, meaning it is not paid and you may be charged penalty fees.

Debit: Withdrawal.

Deposit: Money that you put into an account with a financial institution.

Interest: An amount of ‘extra’ money that you earn by having a positive balance of money deposited into your bank account, earned over time and calculated as a percentage of the balance of your account.

Introductory rate: An introductory bonus offer where a variable interest rate applies to the account for a set time period. At the end of the bonus period, rates revert to the base rates.

Junior transaction account: Transaction accounts for children and youth. A parent or guardian operates the account in the child’s name until they reach legal age, but the child also has access to their account. View our Junior Banking Award for under 12s and Youth Banking Award for under 18s on our website.

Transaction: The movement of money in or out, including deposits, withdrawals, and transfers between bank accounts.

Withdrawal: When instructions are carried out to pay money out of your account and it is paid, e.g. when you get cash out from an ATM.

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