Why you are paying too much for your everyday banking & how to fix it

paying too much for every day banking
Paying too much for your everyday banking?

Australian banks have become some of the most profitable financial institutions on the planet by making profits yearly on household and business deposits, interest payments, and insurance premiums.

As well as using our money to make money by hitting us up with fees, and plenty of them.

In 2015, Australian households paid nearly $4.38 billion collectively in bank fees, which includes an average of about $468 per household. And in 2017 the figure increased to $4.5 billion. The fees charged by the banks ranged from $7 to $60, with many charging $30 or $35 for everyday banking mishaps such as insufficient funds.

Australian banks common fees

Account maintenance & minimum balance

Several banks charge maintaining fees for checking or saving accounts. Starting from as little as $5 to $25 per month.


Using ATMs that are affiliated with your bank can lead to charges from the ATM provider and your bank. You could pay as much as $4 to the ATM provider and $4 to your bank.


It allows purchases to go through even when you do not have money in your account. If you have signed up for your bank’s overdraft coverage, you could pay as much as $35.

Insufficient funds

If you haven’t opted into an overdraft program and make a purchase or other transaction that is more than the amount in your checking or savings account, the bank may decline the purchase or return it unpaid. You could be charged insufficient funds or returned-item fee could be $35.

Excess transaction

Most banks have a limited number of monthly withdrawals you can make from some accounts. After you have reached the number, your bank may charge you. From $3 to $25 per transaction. However, the amount may increase with additional transactions.

Wire transfer

It is the best way to send money fast. But banks often charge for this service. It is so common to be charged $20 or more for domestic transfers and $35 or more to send money abroad.

Account closing

Banks often require you to keep your account open for a certain period or face an early-account-closure fee. You can pay up to $25

Ways to avoid paying too much bank fees

Most bank fees are avoidable. You simply need to maintain a minimum balance or limiting the use of ATMs that are not affiliated with your bank.

Proven tips to minimize your banking costs:

  • Many banks still offer free checking and savings accounts so make use of them
  • Several checking accounts are free when your paycheck or benefits check is automatically deposited monthly. Sign up for a direct deposit, your money will be available immediately.
  • Keep a minimum balance to avoid monthly fees and accidental overdrafts.
  • Most banks look at the entire customer relationship and may offer free services if you maintain both checking and savings accounts with them. So, keep multiple accounts at your bank.
  • Use only your bank’s ATMs to avoid extreme fees. But when you are about to use ATM not affiliated with your bank, take out larger withdrawals to avoid having to go back multiple times.
  • Keep track of transactions and account balances to avoid spending more money than you have.
  • Sign up for Email or text alerts to receive an automatic alert when your balance falls below a certain level.

Ways to save on banking fees

Use no-fee banking institutions. ING Direct and President’s Choice Financial have no service fees and they do not have branches or tellers. All banking is done via the internet, phone or ABM.

  • Make use of "cash back" when you are out shopping; in several stores, you can ask the cashier for cashback to avoid ATM fees.
  • Consider a low-cost account; low costs accounts charge $4 a month and most. But not all the banks have them. you save greatly if you can limit your transactions to eight to 10 per month.
  • Skip the insurance; it's not necessary to have insurance on any of your accounts if you have enough private life insurance coverage.

Where do the interests & charges you pay at the bank go

A bank account is more than just a convenient and secure version of stashing money under your mattress. Although we use bank account daily, a bank works mysteriously. Here are the few reasons why banks have charges or fees:

Your bank account also costs the bank

A bank account is a service offered by the bank. And it costs money to provide services. A bank account is accompanied by physical, online, mobile and phone banking services. Banks must constantly develop these to keep the technology a step ahead of criminals.

You are entitled to banking benefits

Some bank account charges monthly fees which in turn benefit you. You might get travel insurance, or cash back, or a better rate of interest. All these benefits come in handy when you are running low on cash.

How do banks make money?

No company can ever offer a service like a bank account out of the goodness of their heart. Some of the ways all banks cover the cost of providing free current accounts:

  • Interest forgone; banks do not have money lying around because they lend a huge amount of money to people.
  • Interest in lending; although there are accounts that offer interest, it’s less than the interest those banks charge for borrowing using an overdraft, credit card, or loan. So, the interest banks pay on deposits and the interest they receive on lending works out as a profit for the bank.
  • Fees; including interests, banks might charge daily fees for overdrafts, and charges for exceeding your limit.

Cheaper bank accounts in Australia

Most people keep their money in an everyday bank account for convenience, security and easy management. These accounts are designed for daily use, you can hold money for everyday withdrawals and deposits. Accounts for daily use are offered by banks, credit unions, and other financial institutions as a secure place to keep your funds.

Here are the cheapest bank accounts in Australia:

  • Global currency account; it has a $0 monthly fee as well as a $0 ATM fee on by banks, credit unions, and other financial institutions as a secure place to keep your funds. With a 1.25%maximum interest rate.
  • Access advantage; it has a $5 monthly account keeping fee with $0 ATM. A maximum interest rate of 0.02%.
  • Classic Banking; $0 ATM fee and monthly account keeping fee. 0.01% maximum interest rate.
  • Everyday Global Account; it is made up of $0 monthly fees and $0 ATM fees in over 13,000 ATMs in Australia.
  • Orange Every day; you will be entitled to $0 monthly fees and $0 ATM fees at any Australian ATM.
  • Glide Account; it has $0 monthly fees and $0 withdrawal fees in Over 3,000 rediATMs.

How to stop paying too much for your everyday banking?

Banking has charges and interest rates that in return are used to improve my bank account service. However, there is also another cost you should avoid for you to enjoy banking including using your banking card until it reaches overdraft. Being financially smart will save you from drowning into debt due to bank charges.

Spend your money wisely.

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