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MSE News: Moving to Australia: Is banking better Down Under?

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MSE News: Moving to Australia: Is banking better Down Under?

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
16 replies 2.8K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
"We regularly moan about high charges and inefficient banking in the UK, but how does it compare to other countries?..."
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  • callum9999callum9999 Forumite
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    I much prefer our own system. Contrary to your experience, I needed more than just my passport to open a bank account. They also needed to see my visa - which with it being an electronic visa, wasn't particularly easy to do!

    Plus it's irritating to always have to keep in mind where your own banks ATM is if you want to avoid the fee. I know there are at least two accounts that are genuinely free (NAB Classic and one of ING's accounts), but being someone who is responsible with money, I much prefer our model of free banking but with penalties for mis-management. That is perhaps rather selfish of me though!
  • aldreddaldredd Forumite
    925 posts
    To be honest, I didn't really read anything in there that made me want to adopt the Australian systems. Instead, I saw two things that specifically made me not want to:
    - Charges for day-to-day banking which are unavoidable (unless well paid)
    - High charge for cash machine usage

    And, I've opened a few accounts over the years, and can't say I've ever been given an automatic overdraft.
  • MPH80MPH80 Forumite
    973 posts
    Another big difference is that most accounts don't automatically come with an overdraft. There are charges if you don't have the money to cover a transaction. While I don't enjoy paying the charges in Australia, they are reasonable. In the UK, many are whacked with massive fees for breaching their overdraft limit.

    http://www.commbank.com.au/personal/apply-online/download-printed-forms/SavingsInvestment_ADB2852.pdf
    Overdrawing approval fee $10.00

    That fee is per day - roughly £6.50

    Or Halifax:

    http://www.halifax.co.uk/bankaccounts/rates-rewards-fees/
    Unplanned overdraft £5

    Again - daily.

    But with the cash machine fees and the monthly fee - looks like a much worse deal to me.
  • I will be brutally honest and say I don't much care about those who don't look after their finances and are hit by big charges. Having never bounced a Direct Debit in my life I don't see why I should pay a monthly fee for a bank account to 'cushion' the blow for those who do. Selfish: Yes. But I also think that is the fairest way. Lets stick to our own model...
  • I will be brutally honest and say I don't much care about those who don't look after their finances and are hit by big charges. Having never bounced a Direct Debit in my life I don't see why I should pay a monthly fee for a bank account to 'cushion' the blow for those who do. Selfish: Yes. But I also think that is the fairest way. Lets stick to our own model...

    I agree with this and also believe there should be a 3 ticks and your out scheme introduced.

    Same with bankrupts I believe they should be scored on past history like what they blew their loot on and if there was any sign of struggling and continuous spending etc should be banned from stepping anywhere near a bank again!
  • RobTangRobTang Forumite
    1.1K posts
    Having never bounced a Direct Debit in my life I don't see why I should pay a monthly fee for a bank account to 'cushion' the blow for those who do. Selfish: Yes. But I also think that is the fairest way. Lets stick to our own model...

    From your point of view maybe, or you could say their fees are covering your free account; which isn't fair either.

    Fair enough my money should not be used to help other customers; however it would hypocritical while someone else is covering my costs, and in this case it is most likely those who are less financially sound covering those are more financially sound.
    This does not seem right to me, I would really rather that the banks charge us for what we actually use.
  • Hmm good article but was wondering if this accounts viewed from former MSE staff who moved over also knew about business accounts and overdraft account fees in Oz? Been thinking for some time how hard would it be to ship shop and start a new business away from uk shores like Austraila and what the banks would be like for business customers?
    "MSE Money saving challenges..8/12/13 3,500 saved so far :j" p.s if i been helpfully please leave me a thank you but seek official advice at all times from a pro
  • I agree with this and also believe there should be a 3 ticks and your out scheme introduced.

    Same with bankrupts I believe they should be scored on past history like what they blew their loot on and if there was any sign of struggling and continuous spending etc should be banned from stepping anywhere near a bank again!

    Not sure I agree with the 3 strikes model as sometimes people have genuine temporary financial difficulties which they recover from in time at no loss to the bank.

    As for the Australian model I'm not sure about the fees but I suspect "free banking" will end in the UK in the next few years so we might have to expect to shell out to have an account. Running an account for you costs a bank a surprising amount of money.
  • SystemSystem
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    Poorly researched.

    Australian transaction (current) accounts are primarily fee-free - yes, CBA has a monthly fee but two of the four major Australian banks offer no-strings-attached free accounts, and every bank waives the fee if you get paid at least a low-to-average salary. Low-income folks get special fee-free accounts too.

    You also fail to mention the stacks of new online account providers (like First Direct in the UK) that also don't charge fees.... also Citibank's fee-free accounts... credit unions...

    Accounts are effectively fee-free almost universally, but people are discouraged from holding inactive accounts with multiple banks.

    No one pays the ATM fees either - the way Australian cities are laid out, ATMs for all the banks are literally everywhere, it is no effort to use your own bank's ATM, and if you don't have cash, card terminals in shops are universal (unlike the UK).

    Interest... savings accounts pay in the region of 4-5% in Australia, not bad at all. The lack of interest paid on your transaction account subsidises the fees you'd otherwise pay... just like here.

    You could have mentioned the lack of a Faster Payments system (transfers take one working day in Australia, for the moment).

    If I was Martin I'd be asking for my money back on this article ;)
  • callum9999callum9999 Forumite
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    Kerrin wrote: »
    Poorly researched.

    Australian transaction (current) accounts are primarily fee-free - yes, CBA has a monthly fee but two of the four major Australian banks offer no-strings-attached free accounts, and every bank waives the fee if you get paid at least a low-to-average salary. Low-income folks get special fee-free accounts too.

    You also fail to mention the stacks of new online account providers (like First Direct in the UK) that also don't charge fees.... also Citibank's fee-free accounts... credit unions...

    Accounts are effectively fee-free almost universally, but people are discouraged from holding inactive accounts with multiple banks.

    No one pays the ATM fees either - the way Australian cities are laid out, ATMs for all the banks are literally everywhere, it is no effort to use your own bank's ATM, and if you don't have cash, card terminals in shops are universal (unlike the UK).

    Interest... savings accounts pay in the region of 4-5% in Australia, not bad at all. The lack of interest paid on your transaction account subsidises the fees you'd otherwise pay... just like here.

    You could have mentioned the lack of a Faster Payments system (transfers take one working day in Australia, for the moment).

    If I was Martin I'd be asking for my money back on this article ;)

    Wasn't it the norm for virtually all accounts to have monthly fees until NAB launched their Classic account only a few years ago? That's the impression I got at the time (and NABs advertising certainly suggested that to be the case!). Since then a few more options have opened up, but is it really "primarily fee-free"? I'd hardly call 2 major banks having 1 fee-free account equating to the whole system being "primarily" fee-free! And what does "unlike the UK" mean? Off the top of my head I can't remember a single shop I've been in over the past few years that didn't have a card terminal.

    Also, is there any evidence that "no-one pays ATM fees"? I know several people who pay them over there - and I've done so myself on a couple of occasions (you aren't always in a city with your banks ATM on every corner!)

    I do agree it's a poorly researched article though. You would have thought an MSE contributor would be more savvy finance wise than the average person! None of this is particularly hard to find out - I worked it all out myself in less than an hour while I was still in the UK before I'd even set foot in the country!
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