A Canstar survey of 1,024 Australian adults in July found that close to one quarter (24%) – the equivalent of around 4.7 million people* – didn’t challenge or were unsure if they challenged unknown, incorrect or unfair bank fees.
Canstar money expert Effie Zahos said it’s important to keep an eye on your accounts, as small amounts can quickly add up.
“Whether it’s a $5 or a $50 fee, always question your bank if you’re unsure as to what you’re being charged for. There are some fees that will be unavoidable, but for other fees there’s no harm in querying them if it means you could be better off by saving some money,” said Ms Zahos.
When it comes to how much we’re handing over to banks each month, the survey data revealed Australians were paying an average of $73 in banking fees.
Younger generations were found to be paying more in fees, with Millennials revealing they likely paid an average of $155 in bank fees each month, while the youngest group, Gen Z, paid $139.
The research also showed Millennials and Gen Z were the least likely groups to query their bank on unknown, incorrect or unfair charges, with 36% saying they didn’t challenge their bank on fees or were unsure if they did.
“We’re going through a global pandemic and a lot of people will be looking for ways to cut costs, so it’s surprising to see so many Aussies let fees go unchallenged,” said Ms Zahos.
The banking fees Australians could be paying
With Australians spending an average of $876 each year on bank fees ($73 per month), we outlined some of the fees Australians may need to be aware of when it comes to banking matters.
“In this day and age, many of us probably think that because so much banking is done online it’s fee-free, but the data shows people are in fact paying fees,” Ms Zahos said.
“With most of us using cards over cash during the current pandemic we could be facing fees we weren’t previously aware of, such as EFTPOS transaction fees. Canstar data shows 18% of transaction accounts charge this fee, with an average fee of $0.86 per transaction. If your bank charges you this fee and you make 20 purchases on your card each month, you could be unknowingly paying an average of $17.20 in EFTPOS transaction fees.
“There could also be more obscure fees if you’re doing things like cardless cash withdrawal at an ATM, counting coins at a bank branch or obtaining a bank cheque; it’s things like this where you need to query your bank on the costs.”
↓ Keep reading to find out how to avoid paying bank fees
Canstar’s investigation into common transaction fees showed:
- 37% of transaction accounts on Canstar’s database charged a monthly account-keeping fee, with 58% of those accounts waiving the fee if a certain amount is deposited each month. The average monthly deposit required to waive the fee was $1,832.
- 18% of accounts charged EFTPOS transaction fees, with 38% of those accounts offering a number of free transactions before charging a fee. Of those 38%, the average number of transactions per month before a fee was charged was eight.
- 57% of accounts charged a fee for customers overdrawing their account, with the average fee being $12.98.
Transaction Account Fees
|Fee||% of Accounts that Charge a Fee||Average Cost
(for accounts that charge a fee)
|Monthly account-keeping fee||37%||$5.30|
58% of accounts waive the fee if a certain amount is deposited each month.
|EFTPOS transaction fee||18%||$0.86|
38% of accounts offer a number of free transactions before a fee is charged.
|International/Currency conversion fees|
|EFTPOS conversion fee||90%||2.87%|
|International EFTPOS charge||19%||$3.65|
|ATM currency conversion fee||88%||2.86%|
|International ATM charge||69%||$4.65|
|Direct debit fee||12%||$0.60|
|Dishonoured direct debit fee||90%||$13.33|
|Cost of cheque book (25 cheques)||22%||$13.90|
|Dishonoured cheque fee||80%||$15.62|
|Unauthorised overdraft fee||57%||$12.98|
|Branch cash withdrawal fee||26%||$2.21|
|Phone transaction with operator assistance fee||16%||$3.73|
|Failed ATM transaction fee||14%||$0.80|
|Failed ATM withdrawal fee||12%||$1.04|
Source: www.canstar.com.au – 13/08/2020. Based on personal transaction accounts on Canstar’s database.
How to avoid paying bank fees
Ms Zahos has a few tips for consumers who wish to stop paying avoidable bank fees:
Get the right account
Often it’s the simple tips that work out best. If you’re being charged a fee for a certain money habit that you have, then find an account that doesn’t charge you to be you. You can check your bank’s fee schedule on its website or by reading the Product Disclosure Statement or terms and conditions documents.
Request a reminder from your bank
If you are regularly charged overdrawn fees, late payment fees or missed periodical payment fees, then ask your bank what nudges it can provide to remind you of when your direct debits or other regular payments are being made. It could be as simple as an SMS message a day or two before, so that you’re not caught out.
Cherry-pick your products
Some cards are perfect for shopping online as they charge no foreign currency conversion fees, but are not ideal as an everyday card. Be clear on what you want from a financial product and pick and choose the best suite of products to suit your needs.
Consider if bundling is right for you
Only bundle your products if you truly are getting a great deal for your loyalty. Consider comparing products separately as well, to make sure you are getting value for money in a bundle deal.
*4.7 million Australian adults estimate based on Australian Bureau of Statistics data that reveals the number of Australians aged 18+ is 19,746,647 as at December, 2019.