Sorting out your everyday banking
There are a lot of different bank accounts available, not to mention the different features they offer. So how do you choose the right accounts for you? Let us talk you through setting up your banking to find a solution to suit your needs.
Your everyday account
It's most likely you'll need an account to take care of your everyday needs. This is the account you'll receive money into (such as getting your salary directly credited) as well as the account you'll use to spend money, whether it's getting cash out at an ATM, paying your bills with BPay® or shopping online with a Debit Mastercard.
This is known as a transaction account. Although most banks offer this kind of account there are differences between them, so it's worthwhile choosing an account that's geared towards your needs. Work out how you'll be using the account and what fees (if any) will apply.
How do you want to access your money?
It's your money, so you'll want to be able to access it the way you want, with as little effort as possible. Look for a transaction account that will let you do the following:
- Withdraw cash from ATMs - generally, you won't pay anything to withdraw money from ATMs belonging to your own bank. However, you're likely to pay a fee each time you withdraw money from ATMs belonging to a different bank. Westpac has an extensive, nationwide ATM network, which includes Westpac, St.George, BankSA and Bank of Melbourne machines. That's more than 3,000 in total , and they are all free of ATM operator fees.
- Paying bills and transferring money online - paying bills can be a hassle. But with the right account you'll be able to pay bills online or from your mobile when you need to. You can also schedule payments to go out on a regular basis (such as rent or ongoing gym membership) or on the due date (such as your mobile phone or utility bills). Look for an account where you can also transfer money to friends and family should you need to.
- Shopping online with a Debit Mastercard - if you want to shop online, it's worthwhile choosing an account with a Debit Mastercard linked to it. Not only will you use this to access your cash at ATMs, it'll also mean you can shop online using your own money.
Your savings account
Once you've selected a transaction account to take care of your everyday banking needs, it's a good idea to set up a savings account as well. This can be linked to your transaction account so you can move money between the two, easily; you could also set up a regular automatic payment (perhaps every payday).
Not all savings accounts are the same, though. Some offer incentives not to touch your savings, such as paying bonus interest if you meet certain requirements, like depositing a minimum amount or not making any withdrawals.
Other savings accounts like online savings accounts can be linked to your transaction account to move money between your accounts as often as you like (Fees may apply).
You might want to consider setting up both kinds of savings. That way you can have one account for long-term savings goals (such as a deposit on a house or a holiday) and another account for any excess cash you have, so it's earning interest for you before you use it.
Credit cards and overdrafts
Having a credit card can come in handy too. Some offer interest-free days and other features like rewards schemes, where you earn points on purchases, which can then be transferred for rewards (such as air points or gift vouchers). However, to take advantage of interest free days, you need to pay off the closing balance by the statement due date each month.
The interest rates charged on outstanding balances on credit cards are high compared with other types of credit.
You could also consider adding an overdraft facility to your transaction account. With approval comes a buffer, allowing you to 'overdraw' your account by a certain amount. For example, if you set up a $500 overdraft, even if you had no money in your account you'd still have access to $500.
There are no minimum monthly repayments with overdrafts, but you'll pay interest on any amount overdrawn. Your bank may need to authorise your use of your overdraft.
Things you should know
It's important to read the detail about the conditions and any fees or charges that apply to any financial product before you decide to apply for it. Check the eligibility criteria too. Ask the product issuer for a copy of these. Credit criteria apply to approval of credit products.
St.George Bank, Bank of Melbourne and BankSA are divisions of Westpac Banking Corporation
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