Bank fees fall, but Australians still fork out $3.92 billion

Australians forked out $3.92 billion in bank fees last year, new figures from the RBA show. This equates to around $406 per household in bank fees a year.

Overall, Australians paid $285.19 million less bank fees than the previous year – a drop of 6.79 per cent.

However, new research from RateCity reveals that many fees can be largely avoided by shopping around.

• Compare home loans with no ongoing fees today. 

How much Australian households spent on bank fees in 2019:

Source: RBA Domestic Fee data 2019, released 18 June 2020 based on each bank’s financial years ending in 2019. Number of households is from ABS Household and Family Projections, released 14 March 2019.

Note: Exception fees are not included in the total fees.

RateCity research director Sally Tindall said: “It’s great to see bank fees fall in almost every category for two years running. This is in part because the big four banks scrapped their ATM provider fees, however, it’s encouraging to see home and personal loan fees drop as well.”

“Banks have listened to customers’ complaints in relation to fees and acted. It’s savings Australians can put to good use, particularly now many household budgets are feeling the pinch.

“Australians are getting better at managing their money with exception fees falling by $82 million a year, that’s typically charges for late payments and overdrawn accounts.

“Nevertheless, the average household is still shelling out over $400 a year in bank fees. It’s an expense that can be cut back even further by shopping around or haggling with your bank.

“People often throw fees in the same category as death and taxes but that doesn’t have to be the case. If you’re paying fees, get up the gumption to ask your bank to waive them. They might just surprise you and say yes,” she said.

CREDIT CARDS

RateCity data shows the average annual fee is $140 however 31 cards (15 per cent) have no annual fee.

Low fee credit card examples:

HOME LOANS

The average annual home loan fee on the RateCity database is $254 while the average upfront fee is $565.

However, 49 per cent of all home loans have no annual fees and 29 per cent of all home loans have no application fees charged by the lender.

Low fee, low rate home loan examples:

Note: Rates are for owner occupiers paying principal and interest. Government fees and other third-party fees may be charged.

BANK ACCOUNTS

The majority of customers are no longer paying provider fees after the big four banks scrapped them.

However, RateCity data shows at least three banks rebate non-bank ATM fees, while nine banks don’t charge a currency conversion fee when shopping in a different currency.

Notes: ING, Macquarie refund all ATM provider fees in Aus. ING also refunds third party ATM fees overseas. ING has monthly terms and conditions to qualify for refunds. HSBC provides 2% cashback on paywave purchases and a $100 sign up bonus, subject to terms and conditions.

• Average fees exclude products that charge $0 fees. Number of home loans is based on all home loan variations in the RateCity.com.au database. While it’s important to factor in fees to the overall cost of the home loan, interest rate and product features are also important considerations.

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