How to Reduce Your Bank Fees

To reduce the fees you pay on your savings and transaction accounts, you don’t have to search through the different accounts in Australia to find a better one, often you can reduce your bank fees simply by banking smarter with your existing account. In 2008, Australians were charged $11.6 billion in fees, 1.16 billion of those fees were avoidable.

What Are Avoidable Fees?

Avoidable fees are also known as exception fees and are charged when you make an exception to the rules of your banking account. Exception fees can be charged by the bank if:

• You go over the credit limit of your card
• You make a late payment on your credit card or home loan
• You overdraw your credit card or home loan. 
• You have a cheque bounce which you wrote from your transaction account. 
• A periodic payment is not made.

All of these fees are outlined in the terms and conditions of your account, but they are not necessarily charged to you, unless you step outside of the operating rules of your account. Therefore, these fees are known as avoidable because it is possible to avoid these fees all together, every month and reduce your bank fees.

Recent Changes to Bank Fees

After reports were released about just how much banks were gaining from customers in exception fees, 2009 saw most Australian banks reduce the amounts of the fees they charge, or abolish them all together. Following are examples from the Big Four Banks.

ANZ Bank:

• Reduced their overdrawn (honour) fee from $35 to $6 on personal transaction accounts. 
• Reduced their dishonour fee from $35 to $6 on all personal transaction accounts. 
• Reduced their over limit and late payment fees from $35 to $20 on all home loans, personal loans, credit cards and Esanda consumer loans.

Commonwealth Bank:

• Reduced their dishonour fee from $35 to $5 on all personal and business transaction accounts.
• Reduced overdrawn approval fees from $30 to $10 on all personal and business transaction accounts. 
• Reduced late payment fees from $45 to $25 on all home loans, investment loans and personal loans.

National Australia Bank

• Abolished account over drawn fees, previously charged at $30 on all personal transaction and savings accounts. 
• Abolished the $5 monthly account keeping fee on personal Classic and eBanking accounts. 
• Reduced their late payment fee from $30 to $5 for credit card customers.

Westpac Bank:

• Reduced their account overdrawn fee from $40 to $9 on all personal and business accounts. 
• Reduced outward dishonour fees from $35 on personal accounts, and from $50 on business accounts, to $9 on both personal and business accounts. 
• Reduced their periodic payment not made fee from $35 on personal accounts, and from $50 on business accounts, to $9 on both personal and business accounts.
• Reduced the missed payment fee from $35 to $9 on all credit cards and personal loans. 
• Reduced over limit fees from $35 to $9 on all credit cards and personal loans.

How to Reduce the Fees on Your Bank Accounts

While the banks are reducing the fees they charge when you slip up on the use of your accounts, that doesn’t mean you shouldn’t still be actively trying to avoid these avoidable fees by following these tips:

• Regularly check your account balance. Knowing exactly how much is in your account at all times means you are less likely to spend money which isn’t there and overdraws your account, or make transactions which are not included in your monthly total. Internet banking is so fast and easy to use that even if you just login once a day you’ll stay on top of your account balances – after all, when was the last time you went a whole day without turning on your computer; even if you did, there’s an app for that. 
• Identify your periodic payments’ schedule. Be very aware of when money is coming out of your account to cover your loans or insurance payments so you can always be sure there are enough funds. If possible, call the billers and have all periodic payments moved to the same date – preferably your payday – to make them easier to track. 
• Choose an account with no exception fees. It is possible to find a transaction account, savings account or personal loan without exception fees as all Australian banks are getting more and more competitive on fees and it can be as simple as comparing your account options before applying. 
• Choose a credit card with a strict limit. Most credit cards will allow payments to go through, even when you don’t have enough credit available which can wreak havoc on your exception fee tally. However, there are credit cards available (which aren’t necessarily debit cards) which will not allow transactions to be processed if there are not enough funds. These cards are aimed at those with a history of bad credit card habits, but we can all benefit. 
• Make your payments before the due date. This goes for home loans, personal loans and credit cards because if your monthly payment is always due on the 8th, that day might often be a weekend, your birthday, your son’s school excursion…and there are any number of reasons you might miss a payment. Plus, paying before the due date allows for any bank holdups, for your payment to still arrive on time. 
• Take advantage of bank account features which can help. Some accounts will send you an SMS warning when your credit card is nearing its limit and others will make a sweep of all accounts you hold with that provider to cover a payment coming from an account with insufficient funds. You can even use a safety net feature on some accounts which will have an overdraft, but the overdraft is only there to cover you if you accidently go over your limit, or don’t have enough funds. 
• Compare bank accounts before you apply. At Savings Account Finder™ our primary aim is to compare all of the savings and transaction accounts in Australia and compile the top accounts in easy to use comparison tables to help you choose the one which is best for you.

Therefore, make use of the comparisons, reviews and calculators on our site to help you reduce your bank fees – it is possible.