Low-fee transaction account reviews

Say goodbye to bank fees by simply switching to a different transaction account.
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01 .Freedom from fees

Bank accounts

Australian households paid $1.9 billion for transaction accounts in 2008, and banks’ fee income has been growing at 8% annually. We’ve been the victims of unfair and excessive charging and penalties are a big part of the problem; bank dishonour, default and overdrawn transaction account fees amounted to $490 million in 2008. CHOICE led the charge against those penalties, and under pressure from consumers, the Big Four banks responded with fee reductions. NAB went furthest, recently removing account penalties altogether.

We compared standalone transaction accounts available from all banks and the 10 largest building societies and credit unions. For the first time, Australian consumers can choose an account with no monthly fee, no fees for certain ‘everyday’ transactions and no penalty fees. These accounts aren’t bundled with other products; home loan customers, for example, may wish to consider the pros and cons of a mortgage offset account.

For people with high cost accounts, the potential savings from switching account or changing behaviour may amount to $200 or more per year. Average fees paid with uncompetitive transaction accounts (Fujitsu Consulting) include:

  • $5 monthly account keeping fees ($60 per year) 
  • overlimit penalties ($95) and transaction fees ($34)
  • annual cost of using ATMs belonging to another bank or company's network is estimated at $36 on average 

Government data is not yet available, but the collective annual savings from switching accounts could amount to hundreds of millions of dollars for banking customers.



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Many new transaction accounts profiled offer a way to pay no monthly fees; of the major banks, ANZ and Commonwealth have yet to introduce an account with an avoidable monthly fee for standard customers (though like most banks, they offer low-cost basic accounts for pensioners and other low income groups).

Couple-comparing-figures-iSANZ’s Access Select account charges $2 per month in return for six “free” electronic transactions; Access Advantage has a $5 monthly fee, with unlimited withdrawals from the bank’s own ATMs, phone and internet banking, branch, cheque and EFTPOS access. CBA’s standard transaction accounts have $4 and $6 monthly fees. 

Some accounts have specific conditions to waive the monthly fee - commonly, to make a regular monthly deposit of at least $2000. Some institutions go further, charging nothing for certain “everyday” transactions. Holders of such accounts can make an unlimited number of the following transaction types, without paying any fee:

  • ATM transactions at the bank’s own network
  • BPAY 
  • Branch cash deposits and withdrawals
  • Cheque facility
  • Direct credits and debits
  • “Pay anyone” internet transactions

Even with the best accounts, not all services are free and interest usually isn’t paid – extra savings are often best directed elsewhere. A major expense is using “foreign” ATMs – those belonging to another bank or network. Approximately 40% of withdrawals are from such machines, and all those $2 transactions add up to about $640 million per year. The simplest way to avoid those fees is to stick your own bank’s machines wherever possible. Also, all accounts charge fees to use your debit card for cash withdrawals and purchases when overseas. And while most providers continue to apply penalty fees, our Best Buys lead the pack on that measure.

Our research found two transactions accounts with the combination of no monthly fee (with no minimum deposit requirement to waive the fee), an unlimited number of most “everyday” transactions, and no penalty fees.

ING Direct Orange Everyday

ING Direct hasING Direct no ATM or branch network, but customers can use other banks’ ATMs and Australia Post for deposits and withdrawals. Third-party ATM fees apply, but are rebated for transactions of at least $200; if you don’t like withdrawing at least that amount, expect to pay about $2 each time. And when customers use their debit card to get at least $200 cash out from a retailer, ING puts 50 cents into their account (smaller cash out transactions are fee-free).

ING does not charge penalty fees; like most banks, overdraft interest applies. Until 15 May 2010, a bonus of $20 is paid on the first ccasion customers have their salary directly credited to the account, use their debit card and make a direct debit payment – up to $60 in bonus credits.

NAB Classic Banking

This account has NAB-logono penalty fees, no monthly fee and no transaction fees for most everyday transactions. This account ticks almost every box, and unlike some others, doesn’t require customers make a regular monthly deposit or withdraw at least $200 at a time to avoid fees.

One catch is a fee when branch staff set up periodical payments ($1.80 to $5.30 per transaction), but NAB says branch and phone staff will help customers to set up such arrangements via internet banking, thereby avoiding the fees. Other automated payment methods, such as Bpay, direct debits and internet banking transfers, are free.

NAB doesn’t require a minimum withdrawal to avoid ATM fees at the NAB/rediATM network. This Big Four bank also displayed genuine industry leadership when it abolished overdrawn account fees on personal transaction and savings accounts, previously its most common source of customer complaints.

Comparison table list

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Make a selection

Best buy
Conditions for zero monthly fee ($)
No overdrawn account or dishonour penalty fees
Unlimited free own ATM network withdrawals
Unlimited free BPAY, EFTPOS, Pay Anyone
Unlimited free branch deposits and withdrawals

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Table Allowing the user to select a number of products dependant on their filter options.
Items to compare

Select up to 5 items below.
Then click the compare button

Monthly fee ($)Conditions for zero monthly fee ($)Interest rate (annual %)Own ATM withdrawal feeOther ATM network withdrawal feeDirect debit feeBPAY feePay Anyone feeDirect credit fee (incoming payment)Branch cash withdrawal feeBranch cash deposit feeBranch cheque deposit feeDebit card fee (annual)EFTPOS transaction feePhone banking transfer (between your accounts) feePhone banking transfer (to an another bank) feePhone banking BPAY transaction feeCheque book availableCheque book feeFee per cheque writtenAccount overdrawn penaltyAccount overdrawn - more detailsPeriodical Payment insufficient funds penaltyCheque dishonour penalty (outward)Direct debit dishonour penaltyDeposited cheques returned dishonoured penaltyOther information - penalty feesDebit card currency conversion fee (%)Overseas debit card ATM withdrawal fee ($)Overseas Eftpos purchase feeNumber of free transactions per monthFee Rebates providedPeriodical payment arranged online (fee per transaction)Periodical payment arranged in branch (fee per transaction)Own ATM network coverageBalance enquiry (own ATM)Branch accessDebit MasterCard or Visa Debit card availableEveryday banking customer satisfaction score (CHOICE Oct 2009)Good pointsBad pointsWebsiteBest buyNo conditions for zero monthly feeNo overdrawn account or dishonour penalty feesUnlimited free own ATM network withdrawalsUnlimited free BPAY, EFTPOS, Pay AnyoneUnlimited free branch deposits and withdrawals
0None0NoYesPenalties applyYesYesYes
0None5.3NoYesPenalties applyYesNoNo
52500 minimum balance, or Australian Central Home Loan, or aged under 18 or over 550NoNoPenalties applyYesYesYes
0Aged over 552.55% (0 to 41,999); 3.6% (42,000 or more)NoNoPenalties applyYesYesYes
5500 minimum balance0.1% (1000-49,999); 0.25% (50,000 or more)NoNoPenalties applyNoNoNo
42000 minimum balance0.01NoNoPenalties applyYesYesYes
51000 minimum balance0.01NoNoPenalties applyNoNoNo
5Minimum deposit of 2000 or BankSA home loan repayment automatically deducted from this account0NoNoPenalties applyYesYesYes
02000 minimum deposit4% (up to 5,000), 0% (over 5,000)NoNoPenalties applyYesYesYes
02000 minimum deposit0NoNoPenalties applyYesYesYes
61000 minimum balance0.01NoNoPenalties applyNoNoNo
0None0.01NoYesPenalties applyNoNoNo
0A monthly fee may be charged on inactive accounts where the balance is less than 500. An account becomes an inactive account when no customer-initiated transactions are made on the account for six complete consecutive months5.51 bonus rate until 30 June 2010, if customers make at least one deposit and no withdrawals each monthNoNoPenalties applyNoNoNo
0None0NoYesPenalties applyYesYesYes
0None0.05NoYesPenalties applyNoNoNo
0None0.01 to 0.5NoYesPenalties applyNoNoNo
0None0.20% (1,000-50,000)NoYesPenalties applyNoNoNo
0None0.05 (up to 24,999)NoYesPenalties applyYesNoYes
02000 minimum opening balance0.05-3NoNoPenalties applyYesYesNo
62000 minimum balance0NoNoPenalties applyYesYesYes
52000 minimum balanceObtain from branchNoNoPenalties applyNoNoNo
53000 minimum balanceNoNoPenalties applyYesNoNo
0None0.25% (up to 3,000); 3.5% (over 3,000)NoYesPenalties applyNoNoYes
0None0.50% (up to 50,000)NoYesPenalties applyNoNoNo
0None0.01NoNoPenalties applyNoNoNo
5Minimum deposit of 500 or minimum balance of 5000.05NoNoPenalties applyYesNoNo
0None0.05NoYesPenalties applyNoNoNo
5Minimum deposit of 2000 or St George home loan repayment automatically deducted from this account0NoNoPenalties applyYesYesYes
0None0NoYesPenalties applyYesYesYes
5Members who fall into various categories (see website www.teacherscreditunion.com.au/Accounts/Direct Charging and fee changes/Access fee exemptions.aspx ) are exempt from the monthly fee0.01% (up to 9,999), 0.05% (10,000-49,999), 0.10% (50,000 and over)NoNoPenalties applyYesYesYes
52000 minimum monthly deposit0NoNoPenalties applyYesYesYes

Bankwest transaction accounts

BankwestTwo accounts are worth a mention.

Bankwest Hero: customers need to deposit at least $2000 per month to be eligible for this account, which has no monthly fee and no fees for most transactions. It pays 4% interest for balances up to $5000, but no interest after that. Bankwest has a penalty fee “safety limit” – no penalty fees are charged for overdrawn accounts and dishonours unless the amount exceeds $100, in which case the fees are $15.

Bankwest Zero: This account has most of the same features as Hero, except instead of paying interest, it rebates ATM fees charged when customers withdraw from machines belonging to ANZ, Commonwealth Bank, NAB, St George and Westpac.

The mutual alternative

Some of the building societies and credit unions we’ve analysed (known collectively as mutual societies) charge fees for transactions and then provide rebates based on the value of the member’s relationship. Credit unions can offer low costs for those prepared to bundle several financial products with the same institution. For example, mecu rebates up to $25 per month depending on the value of your ‘membership support level’ – the sum of your deposits, plus borrowings, less overdrawn accounts. Similarly, Credit Union of Australia (CUA) offers up to 15 free transactions per month depending on the dollar value of your relationship with the credit union. Newcastle Permanent Building Society claims that after rebates, few of its members pay fees.

big1The ‘X factor’ of mutual societies is the high levels of customer satisfaction  they generate. When we last surveyed our members on their levels of everyday banking satisfaction, mutuals collectively recorded an average satisfaction score of 83% for everyday banking, with CUA and Teachers Credit Union the highest individual institutions (both 84%). The average score for banks was 66%.

You can find details about your local mutual society at the Abacus website. Their branch network is generally far smaller than the banks’, but many mutuals are members of the rediATM scheme, which recently merged with NAB to create one of the country’s largest ATM networks. This means many mutual society members can use both rediATM and NAB machines and avoid paying foreign (third party) ATM fees.

Earning interest

Most of the accounts in this low-fee comparison do not pay interest, so they’re unsuitable for extra savings – you may need a separate or linked savings account for that purpose. However, some transaction accounts pay interest too, for example:

  • AMP First: 4.65% pa
  • Arab Bank Australia Online Savings Account: 5.3% pa
  • Bankwest Hero: 4% pa on amounts up to $5000

For more details on these and other accounts' fees and features, see the interactive table.

The past six years have seen significant developments and improvements in banking for consumers. Here are some of the highlights, improvements and wins.


  • CHOICE launches the Flick Your Bank website to help people switch to the lowest cost accounts.
  • The Consumer Action Law Centre (now Consumer Action) publishes groundbreaking paper on the potentially unlawful nature of penalty fees.


  • The growth of so-called ‘all you can eat’ accounts, where banks offer certain transaction unlimited and fee-free for a $5-$6 monthly fee. 


  • NAB and ANZ cut some penalty fees on concession card accounts.


  • CHOICE and Consumer Action launch Fair Fees campaign against penalties.
  • ANZ’s CEO admits penalty fees are unsustainable, particularly for those who can least afford them.
  • 30% of bank accounts now offer specified unlimited transactions for a monthly fee.
  • NAB cuts penalties from $50 to $30.
  • Westpac is given a CHOICE Shonky Award for penalty fees of up to $50; Commonwealth Bank was also criticised for continuing to
    apply $35 penalties on concession accounts.
  • Dutch-owned Rabobank enters the market, increasing online saving account competition.


  • Adelaide Bank and HSBC awarded a Shonky Award for inward cheque dishonour fees — both subsequently remove these penalties.
  • Westpac removes penalties on basic bank account.
  • CHOICE calls on ANZ and Commonwealth Bank to stop gouging low-income customers with penalty fees on their concession accounts.
  • Bankwest launches the Hero account, paying 5% interest, charging no monthly fee and offering fee-free transactions. But the bank’s penalties remained among the highest – $50 for dishonours and $45 each time accounts are overdrawn, up to a maximum of $135 per day.
  • CHOICE provides penalty fee evidence to federal parliament.


  • Successful CHOICE campaign against banks charging consumers a fee to use other banks’ ATMs – this ‘double dipping’ fee is dropped by all banks.
  • The big banks get bigger, with the merger of Westpac and St George, and Commonwealth Bank’s takeover of Bankwest. CHOICE publicly opposes these mergers.
  • RBA data reveals for the first time the impact of penalty fees on households; $961 million in 2008, including $490 million in deposit account penalties.
  • Westpac and St George reduce penalties to $9 and Commonwealth reduces penalties to $5-$25. But we think these fee cuts could be better.
  • NAB scraps all penalty fees on transaction accounts.
  • ANZ cuts dishonour and overdrawn account fees to $6 per day.
  • Bankwest’s penalties are reduced to $15 and a safety limit is introduced. Bankwest also launches the Zero account, rebating foreign ATM fees from machines owned by the Big Four banks and St George.
  • CHOICE research finds mutuals societies win hands down for customer satisfaction.
  • ING Direct launches Orange Everyday, an account with no everyday fees or penalties, and innovative bonuses.
  • NAB cuts its $5 monthly fee for Classic Banking.
  • Citibank drops its $5 monthly account fee on its Plus Transaction account for all customers, not just those depositing $2000 per month.


Will the ‘perfect’ transaction account be launched – with no everyday or monthly fees, no penalties and paying reasonable interest?

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