Bank fees fall, but Australians still fork out $3.56 billion

Australians forked out $3.56 billion in personal bank fees last financial year, new figures from the RBA show. This equates to around $364 per household in bank fees a year.

However, we paid $404.8 million less in bank fees than the previous year – a drop of 10 per cent. 

How much Australian households spent on personal bank fees in FY20

Source: RBA Domestic Fee data 2020, released 17 June 2021. Each bank provides data on income received over the financial year ending in 2020. Number of households is an estimate from ABS Household Financial Resources, Sept 2020. 

RateCity.com.au research director, Sally Tindall, said: “It’s great to see fees are on the way down for the third year in a row. However, with the average Australian household shelling out $364 a year in personal bank fees, there is still plenty of room for them to fall.”

“COVID has played a big part in this drop. People are taking out less cash, but we’re also not travelling overseas, saving on currency conversion and international ATM fees, which can really add up,” she said.

“This year, credit cards raked in the most in fees, however in dollar terms, it was also the category that saw the biggest drop of $244 million, year-on-year.

“Over the last financial year thousands of households have cut up their credit cards, saving hundreds on annual fees that they just weren’t getting back in perks, especially during COVID when people couldn’t make the most of frequent flyer points and travel insurance.

“Do a Marie Kondo and give your bank fees a spring clean. If they’re giving you grief instead of sparking joy, let them go.

“You might find you’re on a good deal despite the fees, but that shouldn’t stop you from asking your bank to scrap them,” she said.

Today’s RBA data shows home loan fees was the only personal banking category to have risen, this is likely to be as a result of the increase in new home lending and refinancing from FY19 to FY20.

“If you are refinancing your loan and your new lender intends to charge you application fees, ask for them to be waived. Competition between lenders is hot – they might just say yes to lock in your business.

Exception fees, such as late payment fees and overdraft fees, dropped for the third year in a row. While some banks paused these fees at the start of COVID, it’s clear Australians are increasingly avoiding these fees on their own.

“Australians are wising up to avoidable fees, such as missed payment and overdraft fees. They’ve had enough of forking out for bank fines and they’re managing their money better as a result,” she said.

CREDIT CARDS

RateCity.com.au data shows the average annual fee is $141, however 35 cards (17 per cent) have no annual fee.

Low fee rewards credit card examples: 

HOME LOANS

The average annual home loan fee on the RateCity.com.au database is $255, while the average upfront fee is $599.

However, 60 per cent of all home loans have no annual fees and 49 per cent of all home loans have no application fees charged by the lender. 

BANK ACCOUNTS

The majority of customers are no longer paying ATM fees after the big four banks scrapped them in September 2017. 

However, RateCity.com.au data shows three banks – ING, Macquarie Bank and ME Bank – rebate all ATM fees in Australia. 

Notes: Average fees exclude products that charge $0 fees. Excludes business banking 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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