SPEND RESPONSIBLY - Reduce your bank fees
Cutting the cost of everyday accounts
No one likes paying bank fees but a few simple steps can mean big savings on the charges you pay.
Reducing regular account fees
The steps outlined below can help to reduce the cost of your everyday bank accounts.
Match your account to your style of banking
Knowing your own banking style will help you determine the account that is best suited to your needs. Check to see which sort of account user you are:
- Low account user – If you access your account infrequently, less than once or twice a week, consider a fee-free account offering a limited number of transactions each month.
- High account user – If you access your account frequently - ten times or more each month - you may be able to save on fees by opting for an account charging a flat fee for unlimited transactions.
Banking electronically – using ATMs, EFTPOS and the internet is far cheaper than using an over the counter service. Some banks do not charge at all for electronic transactions made within Australia.
Avoid foreign ATM fees
“Foreign” ATMs are those machines that do not belong to your bank or a network your bank is affiliated with. Every time you use a foreign ATM you can be charged a fee of around $2. In addition, your own bank may charge a separate fee. It can make ATMs an expensive source of cash withdrawals. But there are ways to reduce the cost.
Making the effort to track down an ATM belonging to your bank can generate valuable savings in ATM fees. If there isn’t an ATM branded by your bank available, try making cash withdrawals when you use EFTPOS to make purchases. The two transactions are only counted as one by your bank, so you pay a single fee instead of two. It’s an easy way to get two transactions for the price of one.
Alternately many large retail chains will let you make a cash withdrawal at no charge even if you don’t make a purchase.
Using a budget to plan your cash spending will also help you minimise the need to withdraw cash more than a few times a week
Avoiding exception fees
With good money management, exception fees are avoidable.
Your bank will set out any exception fees in the terms and conditions for the financial products it offers. Always read this information to ensure you are aware of the sort of events that can result in a fee being imposed. Below are some common events that can trigger exception fees – along with ways to avoid them.
Insufficient funds to cover a payment
Holding insufficient funds in your account to meet a direct debit or a cheque payment can result in a ‘dishonour’ fee. There are some easy ways to avoid this:
- Manage your money with a budget and plan your spending.
- Keep track of the funds held in your account and schedule direct debits for days immediately following the arrival of your wage or salary into your bank account.
- Ask that cheques be presented promptly to further avoid the risk of having insufficient funds in your account when the cheque is presented.
- Maintain a small balance in your everyday account to cover unexpected payments.
- Contact creditors before a direct debit is due if you think your account may have insufficient funds to meet the payment.
- Always check your account balance before withdrawing large sums of cash or making a large purchase using EFTPOS.
- Review your bank statements regularly for unauthorised transactions.
- Never hand over your ATM card to another person.
- Always read material sent to you from your bank. Your bank will always advise you in writing of any changes to fees and charges.
Overdrawing your account
Withdrawing more funds than you have available can result in an unauthorised overdraft fee. To avoid this type of charge:
- Check your account balance regularly by phone banking or over the internet. You may also check the balance through an ATM, but be aware that some banks may charge for this. (Citibank does not.)
- Allow several business days for cheques deposited to your account to clear before the funds become available. Check that the funds have been cleared before trying to draw against them.
- Limit your transactions. Making repeated withdrawals from your account makes it harder to keep track of the balance – and it can mean paying additional account-keeping charges.