If you have a bank account, you might be incurring bank fees. While these fees might just seem like a few dollars out of pocket, it all adds up and you could be losing hundreds every year.
According to the Reserve Bank’s annual bank fee survey, Australian banks received $12,984 million in income from bank fees charged to customers. The good news is that the survey also revealed that the total amount of bank fees charged to households went down by 7% last year.
Banks have been less inclined to overcharge customers with these fees, particularly after the Banking Royal Commission which has left them vulnerable to scrutiny.
But if you’re concerned about the bank fees you could be racking up, you should check that you are taking all the essential steps to minimise the amount you are paying.
Are eligible for any fee packages or exemptions?
If you’re under the age of 25, over the age of 60, a full-time student, or you receive a government benefit, you could be eligible to be exempted from these fees. Most banks offer low or no-fee accounts to people who fit this criterion.
Have you limited the number of bank accounts you have open?
You should reduce the number of bank accounts that you have open. You may be charged for every bank account you have open – so the fewer accounts you have open, the more you will save.
Have you chosen a fee-free bank account?
You should also check what fees are charged to the types of accounts you have open.
Direct debit accounts usually charge a fee for overdrafts, and credit accounts are the most common culprit for accumulating bank fees. Make sure to investigate the type of bank accounts you can open; as the main banks all have accounts available with different fee-free options.
Are you doing enough to avoid transaction fees?
Some accounts also charge fees for certain transactions. For example, you could be charged fees for withdrawing money out of ATMs, or for using your card in a foreign country. You can take actions to minimise the amount you are charged by doing things like using fee-free ATMS. Usually using your own bank’s ATM will mean you won’t be charged with an ATM fee.
International ATM and transaction fees can also be avoided by choosing a card with no foreign currency fee. For instance, if you open an account with ING, you won’t be charged with international transaction fees and you may be eligible for a rebate on overseas ATM withdrawal fees.
Do you regularly check your bank statements?
Banks can charge you incorrectly, so check if you’re being charged for any fees you’re not meant to be paying. If you notice anything out of the ordinary, you should make a complaint to the bank so that you are reimbursed for any losses.
Are you making sure you’re not accidentally overdrawing?
Another common cause of being charged excess bank fees is if you have set-up a scheduled or automatic payment but on the day, you don’t have enough money in the account to cover it. In this scenario, banks will usually charge an overdrawn or dishonour fee.
Make sure to regularly keep track of how much you have and how much you are spending.
An easy way to do this is to use online banking, where you can keep track of your account balance from your mobile device for free.
So, if you find that you haven’t taken all of these steps, know that it’s never too late to start banking smart and avoiding these fees altogether.
Words by Vidya Kathirgamalingam
With Australia’s increasingly expensive property market and the issue of urban sprawl, houses close to the water are likely to become valued assets. Talk to eChoice about investing in a waterside property today.