Banking in Australia

How Banks in Australia Work

One of the first and most important things you’ll need to organise when moving to Australia is opening a new bank account.

This provides you with the ability to deposit funds to your account, make payments from the account, and access your money 24/7 via automated teller machines, Online and Mobile banking, and at the point of sale. Some banks will offer the ability to open and transfer funds to your new account prior to arriving in Australia.

Types of bank accounts offered in Australia

Transaction accounts

This is your basic everyday bank account, used to depoist funds, pay bills from, and generally manage day to day expenses. This type of account is known as a current account or checking account in some countries. Transaction accounts generally do not pay interest on funds held in these types of accounts. In choosing which transaction account is best for you, compare the:

  • Various fees and charges (usually based on activity or number of transactions)
  • Minimum balance needed to avoid or reduce any account keeping fees
  • Ways to access funds – online, mobile, automatic teller machines (ATMs), or in person via a branch
  • Options like debit cards to access your money or overdraft facilities
  • Savings accounts
  • A bank account that pays you interest on the funds held in your account. These accounts enable you to help grow your savings. The funds held in these type of accounts are generally not needed for your day to day activities. Some saving accounts can have restrictions around accessing your funds, thus removing temptation to dip in and spend.

Most people operate a savings account alongside a transaction account, and transfer money between the two, as required. This is made easier with online and mobile banking. In fact, many savings accounts operate exclusively online, with some offering various incentives (e.g. higher or bonus interest) to save more if you make regular deposits and/or maintain a minimum balance.

In choosing which savings account is best for you, you might want to compare the:

  • Interest rates and any conditions for earning bonus interest and/or an introductory offer
  • Fees and charges relating to account keeping, transaction limits, overdraws, direct debit or dishonour fees
  • Ways to access funds – online, mobile or via automatic teller machines (ATMs)
  • Ability to link to other accounts
  • Term deposits
  • If you have a sizeable sum of money (perhaps from the sale of assets before moving to Australia) that you wish to invest with the certainty of a fixed interest rate, a term deposit could be suitable.

With a term deposits, a lump sum of money is deposited for a selected term at a fixed interest rate and is popular with people who are happy to lock money away and do not need to access it over the medium to long term. They provide certainty and therefore are considered a fairly conservative investment or savings strategy.

In practice, you choose a period of time during which your funds cannot be accessed (usually from 1 month or up to 5 years) with a corresponding fixed rate of interest. At ‘maturity’ (when your term expires), there are generally several options available (these may vary between financial institutions), including:

  • Rolling over your initial investment amount plus the interest earned into a new term deposit (This can often happen automatically if you don’t provide instructions in advance of the term deposit’s end date.)
  • Taking the interest earned as a ‘cash bonus’ and leaving the original amount in a new term deposit
  • Withdrawing your total funds.

Note: Some term deposits allow the interest earned during the term to be paid monthly or annually into a separate account. If for some reason you need access to the funds before the end of the term, a fee will likely apply.

Rates can vary so it pays to shop around for the best term deposit rate for the period that suits you. Several term deposit comparison websites can help. Also, depending on the sum you’d like to invest, you may be able to negotiate directly with the bank, credit union or building society for a ‘special’ interest rate.

Australia’s most popular banking institutions include:

Commonwealth Bank
Virgin Money



What’s required when opening a bank account in Australia?
Once you’ve decided on an account, you can open one online, in bank branches, or over the phone. Either way, and depending on the type of bank account, you will be required to provide your details as well as sufficient identification.

Opening a bank account is effectively entering into a contractual agreement with the financial institution, so there’s usually terms and conditions you must read and accept. If all necessary information, conditions and identification procedures are met, your application should be processed and your account should be opened.

Completing an identity check

Before opening an Australian bank account for the first time, you will need to provide specific identification documents as required by the bank . This can be done once you have arrived in Australia or in some cases from overseas.

Until the identification check is completed and other criteria/conditions are met, you may only be able to deposit funds into the account you have opened, and not make any withdrawals.

Contact the bank you intend to open an account with to find out more about identification requirements.

Transferring funds

There are many ways to transfer money to Australia. If you have already opened an account before you’ve arrived you should be able to deposit funds into your new account and have the money waiting for you when you arrive.
Accessing funds in Australian bank accounts, there are many options:


You don’t have to travel far to find a bank branch. Most main shopping malls will invariably have branches of most major and some overseas banks. For more complex transactions, like foreign exchange or mortgage applications, visiting in person might be the best option. Depending on your account and the identification process, you may need to visit a branch in person to verify original papers or sign documents.


There are thousands of automated telling machines across the country. While most are used to withdraw funds from your account, many are also equipped to accept deposits, allow transfers between accounts as well display account balances and provide mini transaction statements. ATMs branded with your bank will usually be free to use, while other banks ATMs may charge a small processing fee for each transaction.


Electronic funds transfer at point of sale. It’s a mouthful, but it simply means you’re able to pay for goods over the counter at the ‘point of sale’ using a linked debit card or standard credit card. A PIN or signature validates the transaction. For example, if buying groceries at a supermarket, you can pay using EFTPOS, with some retailers also allowing cash withdrawals from your account at the same time (fees may apply).

Mobile phone or tablets

Usually requires initial registration with your bank, then either visiting their mobile site or downloading the respective app for your device. With the proliferation of smartphones and their increased functionality, more and more people are performing banking transactions using mobile phones. The convenience is obvious; being able to bank anywhere, anytime.

Internet or online banking

Usually requires initial registration with your bank, then you login and perform your banking online and in your own time. Convenient, secure and cost-effective (in that you can save on some fees if performed online: check with your bank for details).

Contactless card

A credit or debit card with the Visa payWave or MasterCard® PayPass™ feature lets you use contactless technology for purchases under $100 at participating merchants. No signature or PIN required. No swiping or inserting your card. No more looking for exact change when making everyday purchases. You just hold the contactless card against a compatible terminal for a faster way to pay.


Source: Moving to Australia

IMPORTANT: This information is accurate only at the time of publication.

About the Author Emma Drynan MARN0960361

Emma is the founder and principal migration agent at Freedom Migration. She is extremely passionate about uniting partners and families with their loved ones overseas. It might be because she's a product of a partner visa family.

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