Making the correct choice of a bank account is an important milestone to achieving your financial goals. However, many Australians are rushing into opening an account because they are eager to have a place to deposit their salary. Rushing into the process may result in costly mistakes. Therefore, it is imperative to take a few minutes to compare the various options to ensure your money is working hard for you.
1. Failure to Verify Identification Requirements
Australia has a 100-point ID verification system for financial institutions. However, many applicants are delaying the approval of their accounts because they are rushing into the online application process without the correct identification documents. A passport and driver’s license are usually the correct documents. Yet, it is wise to have a Medicare card or a utility bill handy as an alternative.
2. Not Checking ATM Network Accessibility
Although cash is becoming a dying breed in today’s digital age, you may still find the need to have cash handy. Without research, you may be forced to use an ATM from a different bank because of the limited accessibility of the ATM network of the bank you have chosen. These ATMs have a very high fee charged for the withdrawal of cash from the account. Therefore, it is imperative to check the ATM locations of the bank or whether they refund the third-party fees charged by the ATM operator.
3. Neglecting the Product Disclosure Statement
The Product Disclosure Statement is a legally binding document that outlines the terms of the account. Therefore, failing to go through the statement may result in you missing key information regarding the daily transaction limit of the account. It is important to go through the fine print to avoid costly mistakes.
4. Not Paying Attention to Monthly Service Fees
It is very easy to get caught up in the features of the account and forget about the monthly fees. A small monthly fee may not seem like much, but it adds up over the course of a year. Many Australian banks are willing to waive the fees if you deposit a minimum amount of money into the account every month or are a full-time student.
5. Missing Out on Sign-up Bonuses
Most banks offer a cash bonus or reward points to new customers. However, the catch is that the offer is only available to new customers under certain conditions. You may have to make a certain number of direct deposits within the first thirty days of opening the account. Be sure to read the fine print so you do not miss out on the free money. Open a savings account with ING, for example, and enjoy a reward.
6. Overlooking Savings Interest Rates
When you are opening a new savings account to go along with your new transaction account, be sure to pay close attention to the interest rates. Most banks offer a high introductory interest rate, but the rate drops back down to the base rate after a few months. Be sure you know the difference between the bonus rate and the base rate so that your savings continue to grow long after the introductory period is over.
Set Up Your Finances for Success
Opening a new bank account is a straightforward process. However, by taking the time to review the fee structure of the account and gathering your identification documents well before you go into the bank, you are setting yourself up for success!
