What To Look For In A Transaction Account

21 April 2017
An outstanding value transaction account is something that everyone needs. So how do you find one?

Transactions statistics in Australia

We may be heading (gradually) towards a cashless society, but Australians are making more transactions than ever before.

According to the Reserve Bank, in January 2017 alone, Australians made the following types of transactions:

Credit Cards 220 million transactions, $25.4 billion in total value
Debit Cards 425 million transactions, $22.4 billion in total value
Cheques 6.9 million cheques drawn, $79 billion in total value
Cash ATM withdrawals 48.7 million ATM cash withdrawals, $10.4 billion in total value
Source: RBA, 13 March 2017.

You may not even need your debit card soon, as many banking apps and digital wallets now allow you to make contactless payment with your mobile phone. Apps available so far in Australia include Google Wallet, Samsung Pay, and Apple Pay – all encrypted with the same type of fraud detection and payment protection used on debit and credit cards.From online shopping with PayPal to direct debit to contactless payments to digital wallets, the way we make transactions is changing – so what we need from our transaction account is changing, too.

How to choose a transaction account

A few important factors to think about when you’re comparing transaction accounts include:

  1. Account and transaction fees
  2. Interest rates on offer
  3. Free transactions or fee rebates
  4. Easy access to your money
  5. Other useful features

We discuss each of these in more detail below.

To find a great value account, join more than 12,000 Australians who are comparing transaction accounts on the Canstar website every year (March 2016 – March 2017):

1. What are the fees?

Interest rates are negligible on most transaction accounts, which means that fees can pack a punch if you haven’t chosen your account to suit your spending habits.

Unfortunately, we probably don’t review our bank accounts as often as we change our spending habits. Some possible types of fees that consumers can incur on various transaction accounts include:

Fee Type Maximum Cost
Account-keeping fees $35 per month
ATM fee for using your own bank’s ATM $2 per transaction
EFTPOS fee $2 per transaction
Electronic transaction fee $2 per transaction
Branch fee for a cash withdrawal using branch facilities $5
Foreign transaction fees (currency conversion fees) $5.50
Source: www.canstar.com.au

Based on products listed on Canstar Transaction Accounts Database, March 2017.

2. Are there any interest rates on offer?

It’s not just savings accounts where you can earn a small increase on your money. Interest-earning transaction accounts do exist, although the rates are typically not very high:

Base Rates on Transaction Accounts
Min 0.00%
Average 0.08%
Max 1.50%
Source: www.canstar.com.au

Rates are current as at 1 March 2017. Rates are based on a balance of $1,000.

Only accounts assessed in the Savings and Transaction Accounts Star Ratings have been considered.

3. Are there any free transactions or fee rebates?

It is useful to know how many “free” transactions apply, or if fee rebates are provided by transaction accounts that you may be considering.

With a number of fee-free account options available, recent Canstar analysis found that choosing the wrong transaction account could be an unnecessary drain on your wallet. Here are some ways to avoid ATM fees.

4. How easily accessible is the money for your spending habits?

Transaction accounts with different institutions vary in how convenient it is to manage your account and access facilities such as EFTPOS, direct debit, debit card, BPAY, branches, ATMs, or even cheques.

Before choosing a transaction account, determine the various ways you need to be able to make payments and manage your account. Make sure the account you choose has the types of access you need.

5. Are there any other useful features?

Mobile banking apps and digital wallets are making the humble debit card almost obsolete, since you can now make contactless payments with your mobile phone – but it all depends which bank you’re with.

Digital wallet options available so far in Australia include Android Pay, Apple Pay, Samsung Pay, and Google Wallet – all encrypted with the same type of fraud detection and payment protection used on debit and credit cards.

We have researched which institutions offer which digital wallet services as follows:

Android Pay Apple Pay Samsung Pay
American Express American Express American Express
ANZ (for American Express credit cards, MasterCard credit cards, Visa credit and debit cards) ANZ (for American Express credit cards, MasterCard credit cards, Visa credit and debit cards) Citi
Bank Australia Australian Unity Source: Samsung, March 2017
Bank of Sydney Bank Australia
Bankwest Bank of Sydney
Bendigo Bank Beyond Bank Australia
Beyond Bank Big Sky Building Society Ltd.
Big Sky Building Society Border Bank
EECU CAPE Credit Union Ltd.
CAPE Credit Union Catalyst Money
Catalyst Money Central Murray Credit Union Ltd.
Central West Credit Union Central West Credit Union Ltd.
Community First Credit Union Community Alliance Credit Union Ltd.
Credit Union Australia Community First Credit Union Ltd.
Credit Union SA Credit Union SA Ltd.
Defence Bank CUA
Family First Credit Union Defence Bank
First Option Credit Union First Option Credit Union
Goldfields Money Goldfields Money Ltd.
Goulburn Murray Credit Union Co-Op Goulburn Murray Credit Union
Holiday Coast Credit Union Holiday Coast Credit Union Ltd.
Horizon Credit Union Horizon Credit Union
Illawarra Credit Union ING Direct
ING Direct Intech Credit Union Ltd.
Intech Credit Union Laboratories Credit Union Ltd.
Laboratories Credit Union Lombard Finance
Macquarie Bank Macquarie
Maritime, Mining & Power Credit Union MyState Bank Ltd.
MyState Bank Nexus Mutual
Northern Beaches Credit Union Northern Beaches Credit Union
Northern Inland Credit Union Northern Inland Credit Union
P&N Bank Once Credit
People’s Choice Credit Union P&N Bank
Police Bank People’s Choice Credit Union
QT Mutual Bank Police Bank
Queenslanders Credit Union QT Mutual Bank
Select ENCOMPASS Credit Union Select Encompass Credit Union Ltd.
South West Slopes Credit Union South West Slopes Credit Union
Sydney Credit Union Sydney Credit Union Ltd.
Teacher’s Mutual Bank Teachers Mutual Bank
The Mac Credit Union The Mac
The Rock Credit Union The Rock
WAW Credit Union Co-Operative UniBank
Westpac Unity Bank Ltd.
Woolworths Employees’ Credit Union Warwick Credit Union Ltd.
Wyong Shire Credit Union WAW Credit Union
Source: Android, March 2017 Woolworths Employees’ Credit Union
Wyong Shire Credit Union
Source: Apple, March 2017

To help in your search for a transaction account that represents outstanding value for your needs, compare transaction accounts or check out our latest research.

To the extent that any Canstar data, ratings or commentary constitutes general advice, this advice has been prepared by Canstar Research Pty Ltd ABN 29 114 422 909 AFSL and ACL 437917(“Canstar”) and does not take into account your individual investment objectives, financial circumstances or needs. Information provided on and available in this document does not constitute financial, taxation or other professional advice and should not be relied upon as such. Canstar recommends that, before you make any financial decision, you seek professional advice from a suitably qualified adviser. See Canstar’s Financial Services Guide and Credit Guide at http://www.canstar.com.au/canstar-research-fsg/

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