Banks and Finance
Setting-up a bank account, choosing a bank and getting a credit card can all be confusing and daunting experiences in a new country. In this article we provide you with some handy information and links to help you make the transition smoothly and give you a bit of an insight into how the Australian banking system works.
Choosing a Bank
There are four main banks in the Australian banking system. The ANZ, Commonwealth, Westpac and NAB (or National Bank) are collectively known as “the big four” or “the four pillars”. You’ll hear them referred to a lot. Under the law these banks aren’t allowed to merge – a move to ensure competition in the banking system. These banks have ATMs and branches all over Australia and partnership arrangements with Visa and Mastercard and so on. Check out their websites for more information on what each bank can deliver.
There are also plenty of other banks you’ll come across, like Bank of Queensland, St George and BankWest. These banks are just a bit smaller. If you’re chasing a bank account that is accessible internationally, HSBC operates in Australia.
All banks will offer daily accounts, savings accounts, credit cards, home loans, personal loans and other products. The high level of competition in Australia’s banking sector means the banks are keen for your business, so you’ll often find offers of “zero fee” accounts and so on.
It usual to pay a fee to open an account, then pay a monthly servicing fee. Read the charges carefully as some banks charge if you make more than a certain number of transactions a month or charge dishonour fees if you empty your account, that sort of thing. All banks will have internet and telephone banking access, with quite high levels of security.
Shop around for a good deal. The Australian Bankers’ Association has produced a few booklets to help you choose the right bank account for you and understand Australian banking terms.
Opening an Account
Opening a bank account in Australia can be as simple as applying online. Employers normally pay their staff directly into their bank accounts.
You should open a bank account within six weeks of your arrival, as you usually need only your passport as identification. After six weeks you will need extra identification to open an account
One of those things you’ll probably need is a Tax File Number (see the Australian Taxation System section in Daily Life). Although some banks don’t demand one, if you don’t provide one, the bank will have to take Withholding Tax from any interest you earn in your account.
It is possible to get credit cards of various limits from most banks, as long as you are 18 years of age or older. They will require you to provide a lot of personal information – including your income level, how long you’ve been in work, your financial commitments including other credit cards, your domestic arrangements and your dependents, and so on – and will do a full credit history check. Whether you get a credit card will then depend on how big a risk the bank thinks you are.
However, the rules also differ depending on your immigration status. For instance, if you are applying to the ANZ, permanent Australian residents must be earning at least A$15,000 a year. If you are a non-permanent Australian resident you’ll need to be earning at least A$50,000.
Different banks have different fees and charges, although this is regulated to some extend. It is usually possible to apply for a credit card online.
There is any number of credible money transfer companies and banks which will, for a fee, help you transfer money to an Australian account or to an account overseas, from Australia. For most countries you can send any amount up to A$10,000 in a single transfer. Suspicious money transfers will be reported and investigated by the Australian authorities. You will also need photo identification, such as your passport, but it will need to be in English.
Usually you’ll need to bank with the bank concerned but you can also use the local Australia Post post office. For another example of how this might work, check out Westpac Bank’s website for links on transferring money to and from Australia.
While a money transfer is usually relatively simple, it may not be possible to just transfer money to any country or individual you please. Australian laws control many different payments or transactions involving non-residents of Australia. For instance, you can’t send money to senior officials and ministers in the Zimbabwean Government. Nor can you send money to certain entities and individuals in the Democratic People’s Republic of Korea.
There’s a much more detailed description exchange control on the Westpac Bank website.
ATMs, Cash Machines and EFTPOS
Be aware that in Australia banks are allowed to charge you to use their ATMs. Usually banks don’t charge their own customers, but they can make $2 or so if you use another bank’s cash machine. The machine will notify you before it charges you so you can elect to find another ATM where you won’t be charged.
Australian’s use the term EFTPOS, which you might not have heard before. EFTPOS stands for “electronic funds transfer, point of sale” and it basically refers to when you pay for goods or services with your card, rather than handing over cash.
Visit our Life in Australia section for more articles related to Daily Life in Australia.