Banking in Australia
Opening Bank Accounts with Australian Banks:
It used to be easy to open a bank account before you arrived in Australia, though now only one bank (Commonwealth Bank) offers this service and only 2 weeks before you arrive (so not great). All the main banks will allow you to open an account when you arrive in Australia and this is something you want to do as soon as possible when you get here. Your overseas bank will generally charge you high bank fees to withdraw money from an ATM in Australia. They will also give you retail (poor) exchange rates and pocket the difference each time you withdraw AUD from your overseas bank account. Using an overseas credit card isn’t much better as your bank may charge you an overseas transaction fee as well as profit from the exchange rate they give you.
The great news is that most Australian banks will allow you to open a bank account at any branch with just your passport as proof of identification, as long as you open the account within 6 weeks of your first arrival in Australia. You may find that some of the smaller or regional Australian banks may not necessarily be aware of this identification requirement, so if you don’t have any luck try another bank.
The great news is that TorFX (part of the one of the largest privately owned FX companies worldwide) has a “digital wallet” that will allow you to transfer funds, pay people in Australia or transfer Australian Dollars into other bank accounts before you arrive down under. They do not charge any bank fees either, so can be a great option before you arrive and can get a local bank account set up.
It does make sense, at least initially when you arrive, to open an account with one of the main Australian banks (ANZ, Commonwealth Bank, NAB (National Australia Bank) or Westpac) as these have the biggest branch and ATM networks in Australia and mean that you shouldn’t have any issues accessing help when you need if. Also, most Australian banks will charge you a fee to withdraw funds from another bank’s ATM. Your employer will also need an Australian bank account to pay your salary or wages into.
Activating Your Bank Account:
If you opened an Australian account from overseas (with CBA) then you will need to activate the account so you can make withdrawals (debit transactions) as the accounts are generally opened for deposits only when you are outside Australia. This is usually pretty simple and means going into a bank branch with your passport.
If the bank wrote to you or you chose a particular branch, then it would make sense to either go to this branch or let the bank know if another one is more suitable as they may have ordered your debit card(s) to be held at that branch and will need get them sent to the new branch. If your debit card was pre-ordered, then they will give it to you and you can start using it straight away or they will order one for you which can take up to 10 days. So it’s pretty important to get the account activated sooner rather than later.
Getting an Australian Credit Card:
At some stage and once you meet the criteria, it makes sense to get an Australian credit card as each time you use your card from your overseas bank you will be charged a foreign transaction fee and be given tourist rates every time you pay for goods or services with your overseas credit card. You will also be charged fees (by the Australian banks and your overseas bank) to send money overseas to pay off your credit card.
Getting an Australian credit card isn’t as difficult as most people assume it will be, as long as you have a job in Australia or other regular and verifiable income and are here on a permanent residence or long term work visa (e.g. 482) some of the bigger Australian banks are able to give you a credit card and we would suggest making an appointment to meet with a Customer Service Specialist at your nearest branch to apply for a card if you want one.
Australian Banks Savings Accounts and Term Deposits:
If you sold your home and/or have some funds in your account that you would like to set aside to buy property in Australia, it is a good idea to look at a Term Deposit or high interest savings account rather than keep these funds in a normal savings account that you may have opened before you arrived. This does mean shopping around for the best interest rate and it often also means looking at another account with a different bank, as banks target savings (funds on deposit) at different times (and terms) based on their funding needs.
If you already have a term deposit or are considering one, it also means being diligent and reviewing interest rates on offer before your term deposit matures and moving your funds to where you will get the best return. The banks, credit unions and building societies will also have different rates for 1, 3, 6 or 18 month term deposits and it is important to look for a term deposit period that you won’t break as if you do then generally you won’t earn any interest. i.e. if you open a 6 month term deposit and need to access your funds after 5 months (you break the term deposit before the 6 month maturity date) you will generally earn 0% interest.
Another idea is to see what the best term deposit interest rate on offer is and speak to your own bank to see if they will better, match or get close to the rate you can get elsewhere before you move your funds to another institution. Also, the more you have invested, the more competitive your bank is likely to be (the more bargaining or buying power you will have!).
A good website to check and compare term deposit interest rates on offer is the Canstar comparison site.
Mortgages (to buy property):
Most of the banks in Australia tend to be reactive when it comes to a migrant’s financing needs and they usually rely on you to contact them when you are interested in a mortgage for a home or investment property. They are often also unclear on their lending policies for new migrants and particularly to those who hold provisional visas (as opposed to permanent residence) and expect or assume that you understand how mortgages work in Australia too.
Fortunately, Australia has a thriving mortgage brokering industry that is often an attractive alternative for new migrants. Mortgage brokers generally have access to many different loans through different banks and building societies and can assist you with choosing a mortgage that suits your economic situation and personal needs. We suggest approaching your Australian bank and discussing your mortgage needs with them and also approaching a local mortgage broker for a comparative quote.
