10th Jan 2017
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How to avoid paying any account fees
How to avoid paying any account fees in 2017

For the last 10 years, I have been with the same bank. I believed in being a loyal customer – surely my bank would look after me if they could see how steadfast my banking had been. But late last year I decided it was time to end the relationship.

This isn’t about naming and shaming, but I will say that I was banking with one of the Big Four banks. My ex-bank didn’t do anything wrong, exactly. It was just little things – I wasn’t a difficult customer, but my bank would charge monthly account fees for doing seemingly no work. The interest on my savings kept getting lower and lower. My online shopping purchases would sometimes not be processed for days, and then suddenly it would all be withdrawn at once, making budgeting difficult and leaving me with hefty (and unnecessary) overdrawn fines.

Then someone suggested that I should look at the online-only banks. These banks are still Australian, but because they don’t have physical branches, they can put that money into lower or no account fees and they offer attractive interest rates to try and entice brick-and-mortar bank customers over to the digital side.

I think it’s important to say here that I’m receiving no kick back or incentive of any kind for writing this. That’s because I’m about to name my new bank. There are many good online options, but I chose to go with ING Direct. You must be prepared to do all your banking online or over the phone, but with very little effort you can pay exactly $0 per year in account fees with ING and get a really good interest rate.

To enjoy these benefits, you need to deposit $1000 per month into one account (this is less than most monthly Centrelink payments) and they will waive account fees on all your accounts. Similarly, when you reach this amount they increase the interest on all your savings accounts to 3 per cent (a better rate than I could find almost anywhere else).

If this was the only benefit, I probably wouldn’t have named ING as my new banking beau. But just last week an automatic payment left one of my accounts overdrawn by $2.80. Previously, my Big Four bank would have charged me a $9 overdrawn fee without even notifying me. This time, ING sent me a lovely email, letting me know that the account was overdrawn, giving me three days to sort it out before they would charge me anything (and that anything was a lot less than $9). It was such a different experience – and such a pleasant surprise – that I felt it was worth sharing.

So, this year I won’t be paying any bank fees at all. It’s going to save me about $80 per year, and hopefully earn me a little bit more in interest. And as a bonus, it’s nice to be treated like a valued customer again.

What do you think? Could you give up your bank branch to avoid paying account fees? Do you trust these online-only banks or does it feel too impersonal not speaking to a real human being about your money?

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    COMMENTS

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    bob
    11th Jan 2017
    10:21am
    I have been banking fee free for over 25 years and all it took was a threat.YOUCHARGE_I LEAVE.No problems, but it is not one of the big 4 but an ex building society,and they seem to have more scruples and better customer service.I would hesitate to use a phantom bank that is outside regulation and can be gone with the click of a button.
    Slimmer Cat
    11th Jan 2017
    1:50pm
    These online Banks are hardly "PHANTOM BANKS".
    U BANK is owned by NAB
    BankWest is owned by CBA
    RAMS is owned by Westpac
    Me Bank is owned by 29 Industry Super Funds
    ING is owned by the mighty Dutch Bank ING Group
    CJ
    11th Jan 2017
    10:35am
    There may be better fee free deals for using a credit union instead of a bank - I have been with a credit union for many years and it is now a bank (Beyond Bank). It provides a full range of banking services and offers a fee allowance depending on your relationship portfolio value (a function of how long you have been a member and how much money you have in the bank) For me it effectively means I pay no bank fees.
    Ella
    11th Jan 2017
    11:01am
    I was with one of the big 4 banks for over 30 years and had a number of home loans with them. Then I retired with no regular income and my mortgage paid out. The monthly fees started without me realizing at first and a phone call did not stop this. I also got sick of the late fees . The other issue which tipped me over was that they hung onto my late mothers money for 6 months despite no complications to her will or estate
    I made the decision after research to move to a bank (not one of the big 4 ) who were able to offer me zero fees and flexible account options plus great customer service. Much happier
    Maussie
    11th Jan 2017
    11:08am
    I moved over to ING last november ..Could not be happier.

    11th Jan 2017
    12:23pm
    I haven't paid any bank fees for over ten years now. I have a saving and credit account and a cheque facility and unlimited EFTPOS transactions per month - all with the ANZ Bank. So, what's the big deal? Open your eyes and look around for the best deal, in everything!
    KSS
    11th Jan 2017
    12:31pm
    I haven't paid bank fees ever - and I'm with one of the big 4! No I didn't have to make threats like bob, either.

    You simply have to know the terms and conditions of the account you hold e.g. how many cash withdrawals can you make a month?, Do you have to keep a certain credit balance? If so what is it? When you know all the 'rules' play by them e.g. take cash out when you do a supermarket shop and not at the ATM, know your balance and keep within the credit limit, only use your bank ATM and so on.

    Bank fees, like credit card fees are the easiest charges to avoid.

    Frankly if a supposedly intelligent adult such as Rachel Tyler Jones (an assistant webmaster, in-house writer and general editorial go-to-girl - according to her profile) cannot arrange her own finances to avoid bank fees, she is not the person to whom you should go for financial advice about which child's piggy-bank to get, never mind which bank to join!
    HDRider
    11th Jan 2017
    12:52pm
    Very well said KSS, people never cease to amaze me on here lol.
    Anonymous
    11th Jan 2017
    1:07pm
    KSS, she'd be good federal Finance Minister material you reckon?
    Travelling Man
    11th Jan 2017
    12:37pm
    I have an account with one of the Big Four and another with the Maritime, Mining and Power Credit Union, which will shortly become a bank. I go overseas frequently and have been using this bank's Travel Money, The bank charges 1% of the total amount deposited in the Travel Money card, which locks in the exchange rate at the time of purchase. However I was finding that the overseas banks I used, mainly European, charged a few euros for each exchange. But I found to my delight when I got home that whenever I used my MMPCU debit card to withdraw money from the ATM,s this CU absorbed the exchange cost. Naturally you have to accept the prevalent exchange rate at the time of the withdrawal. I will still keep some money in the the Travel Money card along with cash and credit cards for safely purposes but my primary overseas withdrawals will be from my MMP debit card.
    HDRider
    11th Jan 2017
    12:50pm
    All very interesting, anyone ever hear of a deeming account? A Maquarie CMT account? I haven't paid any fees for 30 years and nor will I.
    ING are simply the best in every department, yes, I've got an account there also, have had for near on 15 years.
    If you overdraw an account though, surely you read the T & C's of the account? You really expect a bank to send you a love email when you deliberately overdraw? Get real, they are a bank not a charity! If you don't know how much you have in your own bank account then you should not have an account, it is such irresponsible behavior like this that causes banks to have these fee's for heavan sake.
    Yes, I am a hardliner, rules is rules, if you break them a tantrum is useless, its your own fault, get over it and I doubt ING will tolerate it for too long either!
    Travelling Man
    11th Jan 2017
    1:37pm
    Have you taken your medication this morning HDR? If so and you're still feeling stressed and at war with society generally how about ten deep breaths along with a Bex and a lie-down!
    PlanB
    12th Jan 2017
    12:14pm
    I am sure once you turn 60 you no longer have to pay fees at the bank -- I am on the aged pension now and I pay NO fees at all -- I have been with the same bank for 66 years but have had a little money in the IAG as they had high interest at the time, I found them to be very good, I still have about 9 cents with them.
    I must ask though how do you put cash in the IGA -- say you get some money for your Birthday etc ?


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