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The Reserve Bank of Australia reported that fees charged to households by banks in 2021 accounted for 23% of their total fees.
According to the report this was lower than the previous year, however this still saw Australians fork out a whopping $3.3 billion in bank fees!
So what exactly are these bank fees?
Some common bank fees are credit card charges, like annual fees, late fees and interest charges. There are also other fees tied to your transaction account that can add up.
Below are a few examples of common transaction account fees and the median amount charged based on research by Canstar.
1. Monthly account fee $6/mo
Some banks waive this with a monthly deposit into your account (usually $2,000), but without this you could be paying more than $70 per year just to have your bank account.
2. Dishonoured direct debit $12.50
This is charged when a payment by a provider cannot be processed due to insufficient funds in your account.
3. Unauthorised overdraft fee $10
May be charged when your bank allows you or a merchant or provider to take out more money than you have available in your account, causing your balance to dip below $0.
Some people can end up paying far more by being charged these fees multiple times.
The good thing is there are ways to avoid these unnecessary bank fees!
Find a bank account that suits your needs.
For instance, if you can’t guarantee a deposit of $2000 every month to avoid paying a monthly account-keeping fee, find a bank that doesn’t charge this fee for a transaction account.
Set and monitor your budget regularly.
Keep tabs on your account so you always know when you need to top up, hold back on a purchase, or contact a provider about pausing or delaying a scheduled payment to avoid dishonour and overdraft fees.
Maintain a minimum balance in your bank account.
This is where budgeting and monitoring your bank account on a regular basis can help. Always having some funds available will help you be ready for unanticipated expenses or direct debits you may have forgotten about.
Use alternative solutions like Beforepay to tide you over.For a quick cash boost when you find yourself short, you can use Beforepay to Cash Out extra funds directly into your bank account and pay only a fixed 5% fee. This gives you a buffer to protect you from having to shell out for dishonour or overdraft fees.
Plus we don’t charge any account-keeping fees, so you only pay when you use us!
Compare transaction accounts that are available with different banks on Canstar and view details on other fees, including international/currency conversion fees, branch cash withdrawals fees and dishonoured cheque fees.
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