Your bank account is a transaction account used for managing your everyday finances, from receiving wages to paying bills. These accounts are designed for easy access to your money, whether you're withdrawing from an ATM, shopping in-store or transferring funds online.
How transaction bank accounts differ from savings accounts
There are two main types of bank accounts in Australia: transaction accounts and savings accounts. Designed for different purposes, transaction accounts are best for paying bills, shopping and receiving wages, while savings accounts are ideal for growing your savings and reaching financial goals. Here’s how they compare:
| Transaction account | Savings account | |
|---|---|---|
| Suitable for | Everyday spending | Saving money and earning interest |
| Access | Instant access via debit card, app or ATM | Limited access to encourage saving |
| Interest earned | Usually none or very little | Interest paid on the amount in the account, credited monthly |
| Fees | May include monthly fees or transaction fees | May include monthly fees or withdrawal fees |
Many Australians choose to use both account types together, managing day-to-day expenses through a transaction account while setting aside funds in a savings account to earn interest. This approach makes it easier to stay on top of spending while gradually building savings. You can learn more about these two types of accounts here .
Types of transaction bank accounts
Transaction accounts come in several forms to suit different needs:
Everyday account
This is a standard transaction account used for daily spending, receiving wages and paying bills. Funds are easy to access via a debit card, mobile banking app or ATM withdrawals. This type of account is accessible by most people, and may offer special conditions – such as waived fees – for certain users like students and young adults.
Business account
If you’re a business owner, a business account helps manage company income and expenses separately from personal finances. These accounts often include features tailored for business use, such as invoicing tools or integration with accounting software.
Kids’ account
Designed for children and teens, kids’ bank accounts offer limited access and parental oversight to help them learn how to manage money. These often come with no fees and low transaction limits.
Joint account
A joint account allows two or more people, such as partners or housemates, to share access to the same funds. It’s ideal for managing shared expenses like rent, groceries or bills.
How to compare bank accounts
When choosing a bank account, it’s important to consider how it fits your financial habits and goals. Here are the key factors to weigh up:
- Interest rates: while most transaction accounts don’t offer much interest – if any – some do pay a small amount on your balance. Though it won’t match the returns of a savings account, it can still give your balance a small boost over time, especially if you regularly deposit larger amounts.
- Account fees: many banks charge a monthly account-keeping fee, often around $5. While that might seem minor, it can add up to $60 a year. Some banks waive these fees if you meet certain conditions, like depositing a minimum amount each month. Others offer truly fee-free accounts, which may be a better choice if your income varies or you can’t always meet deposit conditions.
- Monthly deposit requirements: to avoid fees, some banks require a minimum monthly deposit—this can range from a few hundred to a few thousand dollars. If this might be hard to maintain, consider accounts with lower requirements. Missing the minimum can result in fees and even overdrawn charges if you don’t have enough in your account to cover them.
- International transaction fees: if you travel regularly or shop from overseas websites, international transaction fees can add up quickly. Some banks offer accounts with no foreign transaction or ATM fees, which can save you money abroad.
- Ease of access: accessibility is important, whether you prefer online banking or in-branch service, and your bank needs to serve your needs Most banks offer apps and internet banking, but if face-to-face service is necessary to you, look for banks with branches nearby and policies that let you use them freely without added costs.
- Perks and features: many accounts come with extra benefits. These might include sign-up bonuses, cashback offers, waived fees for students or concession card holders or exclusive deals for account holders. Rewards programs may also be included, offering discounts or points for using your card.
How to open a bank account online
Opening a bank account online is quick and straightforward if you meet the eligibility criteria and have your documents ready. In most cases, the process can be completed in just a few minutes.
To be eligible, you’ll typically need to:
- Be at least 14 years old (children under 14 need to apply in person with a parent or guardian)
- Be an Australian resident (citizens, permanent residents and most temporary residents with a valid visa and plans to stay in Australia for six months or more are eligible)
- Have an Australian residential address
- Have an Australian mobile phone number
- Verify your identity by providing two forms of ID, such as an Australian driver’s licence, Medicare card, passport or Australian birth certificate (if you don’t have these documents, or if you’re new to Australia, you may need to visit a branch to complete your application)
From here, opening your account online is simple:
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Complete the online application
Provide your personal details, contact information and employment status. This part usually takes just a few minutes.
Submit your proof of ID
Upload or enter details from two accepted forms of ID to verify your identity.
Verify and activate your account
After your ID has been checked and your application approved, your account will be ready to use. You can start depositing funds immediately, even if your debit card takes a few days to arrive.
