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

Prudence

Instead of pulling cash from an atm (automatic teller machine) most people will ask for cash out when paying for groceries. Fee free and combines two tasks

Thumbs up for Bpay, the bill paying system in Australia.
Thumbs down to UK banks who retain your cheques for a week! and put the money to work in the short term market for their own benefit

mattykendo

When I was in Oz (admittedly 5 years ago), every bank charged an admin fee, and limited number of withdrawals you could make. This meant you had to carry more money around that you would here.
On the plus side you could choose what denominations of notes you wanted, which was brilliant as you could feel wealthy by getting 5 dollar ones! Our system is definitely better, as long as you can play the game and avoid fees, we get a good deal for free!

mulronie

I quite like the Australian method of paying for what you use. The idea here that my "free" account is subsidised, either by my own non-interest bearing balance, or by excessive charges on others, does not strike me as fair or transparent.

My account costs the bank £X a year to operate, and I think they should be charging me upfront for that, and not recuperating the cost through an opaque process.

Prudence wrote: »

Thumbs down to UK banks who retain your cheques for a week! and put the money to work in the short term market for their own benefit

This isn't true.

Cheques clear in a 2-4-6 process in the UK

Day 0 - deposit cheque
Day 2 - start earning interest
Day 4 - can withdraw against cheque
Day 6 - certainty

You are not missing out on interest at the banks don't actually settle with eachother until Day 2, and the person paying the cheque won't be debited until Day 2. There is no money to be made on processing cheques... why do you think the banks are desperate to get rid of them?

mattykendo

it's a bit like mortgage / other financial advice tho isn't it. Savvy people will use free services to their advantage and the institution will make more off the less savvy. This may change in the New Year with RDR etc, but who knows. If it led to safer system I would rather pay a little, but not sure it would....

callum9999

mulronie wrote: »

I quite like the Australian method of paying for what you use. The idea here that my "free" account is subsidised, either by my own non-interest bearing balance, or by excessive charges on others, does not strike me as fair or transparent.

My account costs the bank £X a year to operate, and I think they should be charging me upfront for that, and not recuperating the cost through an opaque process.



This isn't true.

Cheques clear in a 2-4-6 process in the UK

Day 0 - deposit cheque
Day 2 - start earning interest
Day 4 - can withdraw against cheque
Day 6 - certainty

You are not missing out on interest at the banks don't actually settle with eachother until Day 2, and the person paying the cheque won't be debited until Day 2. There is no money to be made on processing cheques... why do you think the banks are desperate to get rid of them?

I've never understood the whole "unfair" logic on this. How is it unfair? You are told EVERY SINGLE charge and fee the bank has before you open the account (and actually tick a box to say you've read them and agree to them). There is nothing unfair about the bank charging what they told you they would.

Using that logic, are fines (speeding tickets all the way to the enormous fines HSBC just got) unfair? Yes they willingly broke the law, and yes they were fully aware of the existence of these fines, but they shouldn't be subsidising us law-abiding citizens?

coraloburn

I am an Australian who has moved to the UK and I have to agree mostly with "kerrin"'s reply to this article. If you are money savvy it is easy to find good deals with Australian bank accounts. I held an online savings account with Commonwealth Bank which had enormous interest rates of around 6%(compared to the UK's) paid monthly. This account could only be managed online but was linked to my Current account and I felt it easier and much cheaper and more convenient managing it this way anyway.