.And the winner is...
National Australia Bank’s Classic Banking account
With more institutions abolishing monthly maintenance fees and offering free transactions, penalty fees became the final checkpoint for determining the 2011 CHOICE Award for low-fee bank account. ING Direct’s Orange Everyday came in a close second. Both accounts set the benchmark for penalty fees – they don’t charge any. And both offer unlimited, unconditional free transactions of all types. These were also CHOICE’s two top picks at the CHOICE Awards 2010, and have likely driven other banks to get rid of transaction fees over the past year. As the fee-free revolution continues to spread, we hope the NAB and ING accounts will drive the competition to go all the way and give penalty fees the boot.
Interested in seeing how far we have come? See our Bank satisfaction survey 2010.
Picking the CHOICE award winner
To be considered for the nominee short list, institutions had to offer transaction accounts with no monthly fees as a starting point. CHOICE assessed the overall market including accounts from the Big Four banks, a number of smaller banks, and non-bank deposit takers including credit unions and building societies.
We trimmed our initial list down to one with accounts that offer no-monthly-fees with no conditions attached, such as a minimum monthly deposit or balance. From there we narrowed down further to institutions that also offer unlimited, unconditional free own-bank ATM and EFTPOS transactions. To stay on this short list, institutions also had to offer a number of other unlimited transactions at no cost, including direct debit or credit, phone and internet banking, BPay service and over the counter service if available.
Why fee free?
These days it’s easier than ever to steer clear of transaction and account maintenance fees. But penalty fees are a different story. Financial institutions raked in $503 million in penalty fees from household transaction accounts in financial year 2008-09. In 2009-10 that figure dropped to $465 million. The trend is promising, but we doubt it cost the banks that much to deal with overdrawn accounts or dishonoured cheques.
Compare, ditch and switch
Not happy with your bank? Why not Compare, Ditch and Switch your way to a better deal? It's a quick, easy process designed to help you find and switch to an account that suits your needs. It's just one of the ways you can Get a better deal from your bank.