By Tom Watson, Money Writer at Mozo
Moving countries, whether to study or for new work opportunities, can be both an exciting and daunting experience – especially when you’ve got to juggle travel arrangements, move your belongings and find a new place to live.
With so much to think about it can be easy to forget one of the first, and most important financial services you’ll want to set up as soon as you arrive in Australia: an Australian bank account.
Not only will a bank account be essential for your new employer to pay your salary into, you’ll also need one to pay for everyday expenses like food, rent and utility bills. But where’s the best place to start when it comes to choosing the right account for you? Read on as we outline the features you’ll want to keep an eye out for and the information you’ll need to set one up.
How should I choose a bank account?
Rates and fees
There are many features you’ll need to weigh up when choosing a bank account, but a great place to start is by comparing fees. The good news is that plenty of Australian bank accounts don’t actually come with monthly account fees – in fact, they’re becoming a rarity. So a great place to start your search is by comparing fee-free options.
Many Australian banks have also fazed out ATM fees, so if you stick to your own bank’s ATMs or those from one of Australia’s big four banks (ANZ, Commonwealth Bank, NAB and Westpac), you won’t need to pay a cent to withdraw cash.
One thing to bear in mind is that most Australian bank accounts will either come with a 0% or negligible interest rate, which means they won’t be the best place to grow your savings. A better alternative could be to open a savings account as that’s likely to be a more rewarding place for earning interest on your money.
When it comes to convenience, the best way to narrow down your search is to ask yourself if you’re happier doing all of your banking online and over the phone or if you’d rather have the option of going into a branch and talking to someone face to face.
If you’re all about online banking then there are a number of online-only banks, including the likes of ING, ME and UBank, with handy desktop and mobile apps which you’ll be able to use to access and control your bank account with. Otherwise there are still plenty of Australian banks, including the big four and many more, who offer in-branch services to manage your bank account and other banking needs.
Speaking of online banking, Australia has just gone through a banking transformation with the introduction of the New Payments Platform (NPP) which allows near-instant transfers between different banks. Not all banks have jump onboard the NPP yet though, so if super fast transfers sound like your cup of tea then a participating bank is certainly one to consider.
And no bank account would be complete without a payment option in the form of a debit card or EFTPOS card, otherwise withdrawing cash or paying for your first trip to Bunnings would be a bit tricky. Most accounts will come with a mastercard or visa debit card, and either will work just about anywhere in Australia.
A growing number of Australian banks are also now offering mobile payment options such as Apple, Google and Samsung Pay, so if you love the idea of paying with your smartphone then it may be worth checking out bank account with mobile payment capability.
Chances are if you’ve moved to Australia you’re going to be visiting family back home or travelling overseas in the future, which means choosing a travel-friendly Australian bank account may be a high priority.
According to the Mozo database there are currently ten banks which offer bank accounts with travel friendly features such as no foreign exchange fees or overseas ATM fees which could help ease the pain of overseas fees on your next international trip.
What will I need to open a bank account?
Once you’ve nailed down an Australian bank account which ticks all your boxes, your next step will be actually opening one. This is a really straightforward process which can take as little as ten minutes and which you’ll generally be able to do online or at a bank branch. When it comes time to opening one, you will need to have the following documents and information handy.
- Usually at least two forms of identification including a birth certificate, passport, visa, citizenship document or driver’s license.
- An Australian residential address
- An email address and phone number
Some banks, including the big four, even allow customers to open a bank account online before they set foot in Australia. Although if you do choose to open one before you depart for Australia you will still need to confirm your identification and other details by visiting a branch once you arrive in the country.
What about sending money overseas?
While an Australian bank account is going to be essential for receiving your salary and paying for your everyday needs, if you’re planning to send money back home or anywhere else overseas then using your bank may not be the best value option.
Not only do banks tend to charge fees for online, over the phone and in-person transfers, the exchange rates they offer are typically poorer than those offered by international money transfer specialists.
For example, let’s say you wanted to transfer $10,000 Australian Dollars to India. According to the Mozo International Money Transfer comparison tables*, the average amount you would get with a big four bank for a $10,000 AUD transfer is 493,118.25 Indian Rupees. However, if you used a specialist provider like OrbitRemit you or your recipient would receive 505,624 Rupees instead. It just goes to show that whether you’re looking for your first Australian bank account to open, or looking for the best way to send money back home, doing your homework by comparing fees, features and rates can really pay off.
*Rates accurate as of January 22, 2019.
About Tom Watson
Tom Watson is a Money Writer and banking expert at financial comparison site website mozo.com.au. He is passionate about providing everyday Australians with the information and insights they need to make better choices and save money on all of their financial products.