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Linking your bank account to a high interest savings account may be necessary to earn bonus interest. Compare your options today and choose an account that suits your financial needs.
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$0 monthly account keeping fees.
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Over 3,000 rediATMs
Enjoy access to hundreds of ATMs nation-wide with this bank account that also charges zero ongoing fees. Avid savers can also link up to nine savings accounts to their bank account.
Account Keeping Fees $0 Monthly | ATM Fee $0 Over 3,000 rediATMs | Company  | Features Apple Pay Google Pay Interest rate Overseas ATM facilities Samsung Pay Linked account | Go to site | An everyday bank account that does not charge ongoing fees. Customers can also take advantage of Apple Pay, Google Pay or Samsung Pay. More details | Highlighted | ||
Account Keeping Fees $0 Monthly | ATM Fee $0 Over 3,000 rediATMs | Company  | Features Apple Pay Google Pay Interest rate Overseas ATM facilities Samsung Pay Linked account | Go to site | Enjoy access to hundreds of ATMs nation-wide with this bank account that also charges zero ongoing fees. Avid savers can also link up to nine savings accounts to their bank account. More details | |||
Product | Account Keeping Fees $0 Monthly | ATM Fee $0 Over 13,000 ATMs customers can use in Australia with no ATM fees | Company  | Features Apple Pay Google Pay Interest rate Overseas ATM facilities Samsung Pay Linked account | Go to site | Enjoy the perks of a credit card without the pesky fees with this bank account that charges zero international transaction fees and offers fee-free access to ATMs worldwide. More details | ||
Product | Account Keeping Fees $0 Monthly | ATM Fee $0 Free access to thousands of ATMs nationwide | Company  | Features Apple Pay Google Pay Interest rate Overseas ATM facilities Samsung Pay Linked account | Go to site | More details | ||
Product | Account Keeping Fees $0 Monthly | ATM Fee $0 Over 7,000 ATMs | Company  | Features Apple Pay Google Pay Interest rate Overseas ATM facilities Samsung Pay Linked account | Go to site | More details | ||
Account Keeping Fees $0 Monthly | ATM Fee $0 Free access to thousands of ATMs nationwide | Company | Features Apple Pay Google Pay Interest rate Overseas ATM facilities Samsung Pay Linked account | Go to site | More details |
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If you manage most of your incoming and outgoing money through an everyday bank account, you might be wondering if you can earn a decent amount of interest on a standard transaction account.
While some transaction accounts come with a higher-than-average interest rate, these rates still tend to be lower than the interest rates available on savings accounts.
What’s the difference between a transaction account and a savings account?
A transaction account, also known simply as a ‘bank account’, is a standard account used for day-to-day expenses. This is typically the account that you have your salary paid into and use to pay bills. You can access funds using a debit or credit card, and usually don’t have to pay any fees for ATM withdrawals or transfers.
A savings account is designed to help you save over the long term and allow you to earn interest on the money you’ve deposited into the account. Typically, they offer a higher interest rate than a standard transaction account.
Savings accounts often carry withdrawal fees and monthly withdrawal limits to encourage you to save. This is also advantageous for banks, because they can use customers’ savings deposits to balance their books when lending money to other customers.
How do bank account interest rates work?
Banks set interest rates based largely (although not entirely) on the Reserve Bank of Australia’s cash rate. Usually, a lower cash rate equals a lower interest rate on your savings account.
Some high-interest bank accounts earn compound interest, which means you earn interest on the money you have deposited as well as the interest you’ve earned. Other accounts earn simple interest, which means you only earn interest at the end of a specified term.
It’s important to check how often interest accrues on a bank account, because a compound interest account will yield higher returns over time.
For example, if you invest $8,000 for three years at 5 per cent per year, with simple interest paid at the end of the term, you would earn $1,200 in interest ($400 each year), giving you a total balance of $9,200.
If you invest $8,000 for three years at 5 per cent, with compound interest calculated and added monthly, you would earn $1,292 in compound interest after three years, giving you a total of $9,292. The total returns are higher because you earn interest on interest.
Advantages and disadvantages of high-interest bank accounts
There are plenty of investment options out there, and a high-interest bank account is just one of them. Here are some of the potential benefits and drawbacks to having a high-interest transaction account:
Advantages
- Safe investment – Your money is protected under the Australian government’s guarantee for authorised deposit-taking institutions (ADIs) such as banks, building societies and credit unions.
- Easy access – Because it’s a transaction account, it’s easy for you to access your money when you need it.
- Dual function – You can use a single account for everyday expenses as well as to save money.
Disadvantages
- Lower interest rates – Typically, even high-interest bank accounts have a lower interest rate than savings accounts.
- Savings and everyday expenses are combined – You may find it easier to stick to a savings plan if you have a separate savings account that you don’t dip into for day-to-day expenses.
- Returns are modest – Other investment options may yield better returns (although they also tend to be riskier).
What to look for when choosing a high-interest bank account
Not all high-interest bank accounts are created equal, so it pays to do some research and find one that can offer you the most value and savings potential over time. Here are three of the key considerations:
1. Introductory rates
Some bank accounts come with an offer of a high introductory variable interest rate for a set period. Once this period is over, the interest rate will default to the standard. Check how long the introductory rate applies (if there is one) and whether the standard rate is reasonable.
2. Fees
Some high-interest bank accounts come with account-keeping fees or transaction fees. If you choose an account with fees, make sure the benefits outweigh the costs.
3. Savings goals
Your savings plan and goals should dictate the type of high-interest bank account you choose. For example, if you are putting money aside for a year to go on a holiday, an account with a high introductory rate but lower standard rate might suit you. On the other hand, if you are saving for a house deposit over a few years, you may want to look for a long-term savings account with a more stable interest rate.
Take a look at RateCity’s high-interest bank account comparison tool to find an account that’s right for you.
Nick Bendel
Property Personal Finance Writer
A property and personal finance writer, Nick Bendel covers property, loans, credit cards, superannuation, and other bank products. Nick has previously written for The Adviser, Mortgage Business, Lifehacker, Business Insider, Yahoo Finance, and InvestorDaily, and loves getting elbow-deep in the latest ABS, APRA and RBA data.
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Frequently asked questions
Can you open another account at the same bank?
Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.
Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.
Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.
Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.
Can I start a bank account online?
Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.
Do you need a bank account to get a credit card?
To get a credit card, you need to show proof of income, which will almost certainly require you to have a bank account.
Can I close my bank account over the phone?
In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.
By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.
In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.
Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.
What do I need to open a company bank account?
To open a company bank account, you will probably have to provide 100 points of ID, an ABN and an ACN. You will probably have to provide the details of all signatories as well.
How do I close a bank account?
Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.
Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.
- Cancel any scheduled or recurring payments
- Update your direct debit details (such as loan repayments) with creditors
- Export your payee address book (to keep a record of saved third-party bank account details)
- Transfer the balance of your account (to the new bank account)
- Close your account online, or by calling the bank or visiting a branch
Can foreigners open bank accounts in Australia?
Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.
How long does it take to open a bank account?
The length of time it takes to open a bank account varies, depending on whether you want to open it online or in person.
Online
Most banks and credit unions have simple online applications that usually take no more than 10 minutes to fill out. It can be especially fast if you have your identification documents like your driver’s licence and passport handy. Sometimes you will instantly be approved and the bank account opened. However, depending on the financial institution, it may take a day or so to be processed and your account number issued. Your account information and ATM or debit card will then be mailed to you, which usually takes between five to 10 days.
In person
If you decide to go into a branch or office to open a bank account, it may take about half an hour. Make sure you bring your identification documents with you. Also book an appointment if you can, otherwise you might be forced to wait in line. Sometimes your ATM or debit card will be issued on the spot, otherwise you’ll need to wait for one to arrive by mail, which usually takes between five to 10 days.
Do I need to open a business bank account?
Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.
If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.
There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.
Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.
It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.
Can I open a bank account in another country?
Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.
Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.
The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.
Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.
Can you get a payday loan without a bank account?
Yes. Some payday lenders are willing to transfer loans to prepaid debit cards instead of bank accounts.
How do I transfer money from Paypal to my bank account?
Transferring cash from Paypal into your bank account is simple…if you have a Paypal account that is.
Once you’re logged into your Paypal account, the account balance will appear on your home page. Below your balance are two options:
- Add money
- Withdraw money
Choose option two if you want to transfer money from your Paypal account to your personal bank account.
The next screen will prompt you to either enter new bank account details or choose a bank account that’s connected to Paypal. You can always add more bank accounts to your Paypal profile.
Another way to transfer out of Paypal is by jumping to the wallet tab on the top menu, and clicking ‘transfer money’. Both options will give you the same result.
Can you deposit money into somebody else's bank account?
One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.
The basic information you need to deposit money into a third-party bank account is:
- Payee’s name
- Bank, building society or credit union (though this isn’t necessary)
- BSB (or bank code, which is the branch identifier)
- Account number
Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.
A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.
Can the government take your money from your bank account?
There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.
Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice.
A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.
To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.
How can I check my bank account balance online?
Checking your bank account balance online is a simple process. Once you’ve logged in to your online banking, clock on the relevant account and the balance should be visible.
Can debt collectors take money out of your bank account?
Many people find themselves struggling to cope with debt at one time or another. In these cases, a debt collector could contact you to demand payment for a debt, to explain the consequences of you failing to pay a debt, or to organise alternative payment arrangements.
If you’re contacted by a debt collector, you may be wondering what their rights are and whether they can take money out of your bank account.
Creditors cannot access money in your bank account unless a court order (also known as a ‘garnishee order’) is made to allow creditors to recover debt by taking money from your bank account or salary.
If this happens, the creditor can take money out of your bank account unless you pay the debt in full or make an alternative payment arrangement such as paying in instalments through the court.
Can you open a bank account at 16?
Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.
How do I open a bank account for a baby?
If you’ve just welcome a new baby into the world, congratulations. Opening a bank account for your child can be a wonderful first gift.
Before you can open your child an account, you’ll need to have a birth certificate or passport for your baby.
As the parent or guardian, you’ll also be listed as a joint holder on the account. This means you’ll need to have proof of your identification and address (a driver’s licence, passport, birth certificate or Medicare Card).
Many banks and credit unions offer baby banks accounts. Usually, you can apply online; otherwise you can head into a local branch or office with your documents.
How do I open a new bank account?
There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.
It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.
A comparison site like RateCity can help you work out what bank account product matches your needs.
Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.
- A couple of forms of identification (such as driver’s licence, Medicare card, passport)
- Tax file number
- Residential address, contact phone number and email (though email is not essential)