Give your transaction account a financial health check

It can be easy to overlook the importance of having the right transaction account, but this new financial year is the perfect time to give the place you store your money a financial health check.

Have you been using the same transaction account since you were a kid? Is this because your parents are also with the same bank? You may be losing money in fees or missing out on some serious perks just because you’ve never compared your options.

To know if you’re with the right transaction account, you’ll want to perform a financial health check. This is where you ensure your financial products are helping you to reach your goals while keeping avoidable costs down.

To give your transaction account a financial health check, you can start by asking yourself a few questions.

1. Am I paying unnecessary fees?

RateCity analysis found that across its database, 26 per cent of transaction accounts charged monthly account keeping fees.

This means that out of 155 accounts, there are 115 that don’t sting you for the convenience of banking with them. This makes it a no brainer to try and choose an account to avoid paying monthly fees.

Typically, these ongoing fees are charged when you’re unable to meet minimum requirements for the account – usually depositing a minimum amount each month.

Take a look at your account’s conditions and triple check that you’re both across them and able to meet them. Perhaps the minimum deposit amount has increased since you joined? Perhaps you’re no longer earning the same income because of the economic impacts of COVID-19? All of this needs to be factored into, not only any loans or credit cards you have, but also your transaction account.

2. Am I paying fees to use foreign currency?

When you use your debit card internationally or on overseas websites to shop you may be charged a foreign transaction fee, which occurs when currency conversion is required. This is typically around 3 per cent of the purchase price.

This means that if you were shopping online on an American website and spent $USD500, you may be charged an additional USD$15 in foreign transaction fees. Once you convert this back to Australian dollars, the costs can really add up, especially when these fees can be avoided.

The most competitive transaction accounts may offer customers flexibility on overseas purchases by waiving the cost of foreign currency conversion fees and even allowing you to hold foreign currency.

In fact, RateCity analysis found that across its database, 7 out of 155 transaction accounts either refund, or don’t charge, foreign transaction fees.

Further, some transaction accounts charge you when you withdraw funds from overseas ATMs, sometimes as high as $5.

There are 11 transaction accounts on the RateCity database that either refund, or don’t charge, overseas ATM withdrawal fees. If you’re planning an overseas trip in the future, you may want to consider opening an account that doesn’t charge these fees or waives them entirely.

3. Am I getting any extras?

Some transaction account providers offer customers perks and features for using their debit cards. This may be something you now consider valuable in your banking, and a financial health check may reveal if other accounts that do offer these perks are worth switching to.

Transaction account perks may include:

• Cashback offers
• Qantas points
• Gifts, such as a bottle of wine

Only a handful of transaction accounts offer these perks, so you’ll need to do your research and shop around to find the right one for your needs.

Luckily, RateCity has done the hard work for you.

RateCity has rounded up some of the most competitive transaction accounts and rewarded them with a coveted RateCity Gold Award. These awards factor in fees, payment types, customer service access, perks, ability to hold foreign currency and more.

Best Transaction Accounts for 2020

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