A bank account is a financial account, which stores money on behalf of a customer. It is an agreement between a bank and a person or an institution, whereby the bank agrees to hold cash and the other assets on behalf of the other party. However, the client has the right to withdraw the total amount of money on demand. If you use check-cashing outlets or the piggy bank, you are missing out on the many benefits of managing your money with a bank account.
Bank accounts are not just for those with a fortune to stash away—anyone can open one. Four large banks dominate banking in Australia (ANZ, Westpac, Commonwealth, NAB), but many smaller banks offer financial services. The government acutely regulates the bank system. Without further ado, let us move to our matter of concern. “How to open a bank account in Australia?” Here is a complete guideline for you.
These requirements are updated regularly and are applicable for both the native Australians and the foreigners working there.
One of the first things you will need to work out is how to get your finances in order. Once you are in Australia, also getting a local bank account is a high priority. You can open an account online or by visiting a bank branch in person. You will need at least two pieces of identification, which should be 100 credit points or more. Here is how the points system work:
1-Organize your banking before you arrive
Sorting out your banking needs before you arrive at the bank in Australia is a sensible approach. It means you will not have to worry about finances when you get here and can instead concentrate on finding your feet and exploring this new country. To help new Foreigners sort out their financial situations before they arrive on Australian shores, some banks offer handy bank migration programs. Contact them when you plan to move to Australia.
If you are a native, sort out your previous records and make sure all of your assets are listed in the income tax office.
2- The documents and paperwork needed for an Australian bank account
You will need at least two pieces of identification, which should total 100 points or more. Here is how the points system work:
As you can see, it is a fair and straightforward process. Even if you are a foreigner, making up the requisite 100 points shouldn’t be too hard.
3-Fees and charges to think about
No-fee bank accounts in Australia are the norm, as many institutions do not charge monthly fees and offer unlimited transactions. If they do, they are deficient and are usually waived provided a minimum amount is deposited each month. The limit is typically set to 2,000 AUD (1,377 USD), which is lower than the average monthly salary in Australia.
Fees on ATM
Fees you will need to be aware of, however, are ATM withdrawals. With more than 29,000 ATMs sprawled across the country, you would have no issue taking care of banking transactions when you need to. ATMs are usually free if you withdraw from your own bank’s ATMs.
Overdraft fees is charged when the specific transaction you made is higher than your account limit. It this case, some banks charge overdraft fees while others do not charge. The fees are very less normally 2$ a year.
Banks commonly add international transaction fees for card purchases made abroad. These might be 2-3 % of the cost of the purchased items, and will usually be rolled into the dollar charge, which you can later see on your bank statement.
If you need to move money from your Australian bank account to an account held in a different country or currency, there may be a fee. The details will vary according to the account you own, the amount you want to transfer, and where you are sending money. However, expect to pay in the range of A$10 to A$30 for an outward telegraphic transfer to a different country.
Bonus Tip Before You Go to Open an Account
To be on the safe side, you may also want to ask about any other rates and charges, currency conversion fees, and international money transfer fees before settling on a bank. It will help you organize your future expenses.
4-What You Get
You will get a bank card with a four-digit Personal Identification Number called PIN. It is needed to withdraw money from an Automatic Teller Machine, called ATM, or is required when you make big purchases.
You should not share the PIN with anybody as you risk getting your money stolen. ATM thefts are common these days, and many of the victims are those who mistakenly spoken their PIN in public, and later payment got taken through their accounts.
Australian bank account options
Customers of Australian banks can choose from a wide range of account options. These include:
Everyday transaction accounts
These accounts also referred to as cheque accounts, are for everyday transactions such as shopping, paying bills, and depositing salary. Transaction accounts generally have monthly fees associated with them, depending on the types of service required. These fees and the number of transactions allowed per month vary according to the bank. Transaction accounts rarely generate interest.
You may be able to open one of these when you open your regular spending account. It can come in handy if you want to keep some money aside and if you are going to earn some interest on the money, you’re holding in your account.
Credit card accounts
Like in other countries, these allow you to access money that is not immediately available.
Foreign currency accounts
Sophisticated and accessible banks will offer these types of accounts for those who are still receiving income in a different currency.
They are used for opening an account with a spouse, business partner, or another second party.
Higher rates of interest are paid on these accounts compared to savings accounts. However, a minimum balance is generally required, and money must be left in an account for a certain amount of time – known as “the term.” Interest rates are usually fixed, and interest is paid at the end of this term.
Bonus interest accounts
Some savings accounts can offer bonus interest as an incentive not to touch your cash. You must meet specific requirements such as depositing a minimum amount or not making any withdrawals over a set period.
Benefits of an opening bank account in Australia
Immediate access to your money
If you transfer money to your Australian bank account before you leave, you’ll be able to withdraw from your account as soon as you land in Australia. You’ll be asked to present positive identification when collecting your bank card.
Lower fees when using domestic services
Moving or withdrawing money between international and Australian accounts incurs high fees, whereas you’d pay low transaction fees when using a local account. These kinds of fees are usually waived for students.
When you open an account before leaving, you can provide your future employer with your banking details ahead of time, saving yourself time on administration.
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