How Banks in Australia Work, Information for Migrants

One of the first and most important things you'll need to organise when moving to Australia is opening a new bank account. This provides you with the ability to deposit funds to your account, make payments from the account, and access you money 24/7 via automated teller machines, Online and Mobile banking, and at the point of sale. Some banks will offer the ability to open and transfer funds to your new account prior to arriving in Australia.

Australia's first bank, Westpac, has a diverse team of banking specialists in Australia and overseas who can assist you with all your banking needs during your move to Australia. They have a range of everyday banking and savings accounts and provide additional services that cater for the specific needs of newcomers to Australia. Westpac also allows you to open your new bank account up to 12 months before arriving in Australia. (Conditions and criteria apply.)

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Types of bank accounts offered in Australia

Transaction accounts
This is your basic everyday bank account, which you can use to deposit funds, pay bills, and generally manage your day to day expenses. In some countries this type of account is known as a current account or checking account in some countries. Transaction accounts generally do not pay interest on funds held in these types of accounts. In choosing which transaction account is best for you, compare the:

  • Various fees and charges (usually based on activity or number of transactions)
  • Minimum balance needed to avoid or reduce any account keeping fees
  • Ways to access funds - online, mobile, automatic teller machines (ATMs), or in person via a branch
  • Options like debit cards to access your money or overdraft facilities

Savings accounts
A bank account that pays you interest on the funds held in your account. These accounts enable you to help grow your savings. The funds held in these type of accounts are generally not needed for your day to day activities. Some saving accounts can have restrictions around accessing your funds, thus removing temptation to dip in and spend.

Most people operate a savings account alongside a transaction account, and transfer money between the two, as required. This is made easier with online and mobile banking. In fact, many savings accounts operate exclusively online, with some offering various incentives (e.g. higher or bonus interest) to save more if you make regular deposits and/or maintain a minimum balance.

In choosing which savings account is best for you, you might want to compare the:

  • Interest rates and any conditions for earning bonus interest and/or an introductory offer

  • Fees and charges relating to account keeping, transaction limits, overdraws, direct debit or dishonour fees

  • Ways to access funds - online, mobile or via automatic teller machines (ATMs)
  • Ability to link to other accounts

Term deposits
f you have a sizeable sum of money (perhaps from the sale of assets before moving to Australia) that you wish to invest with the certainty of a fixed interest rate, a term deposit could be suitable.

With a term deposit, a lump sum of money is deposited for a selected term at a fixed interest rate and is popular with people who are happy to lock money away and do not need to access it over the medium to long-term. They provide certainty and therefore are considered a fairly conservative investment or savings strategy.

In practice, you choose a period of time during which your funds cannot be accessed (usually from 1 month or up to 5 years) with a corresponding fixed rate of interest. At 'maturity' (when your term expires), there are generally several options available (these may vary between financial institutions), including:

  • Rolling over your initial investment amount plus the interest earned into a new term deposit (This can often happen automatically if you don't provide instructions in advance of the term deposit's end date.)
  • Taking the interest earned as a 'cash bonus' and leaving the original amount in a new term deposit
  • Withdrawing your total funds

Note: Some term deposits allow the interest earned during the term to be paid monthly or annually into a separate account. If for some reason you need access to the funds before the end of the term, a fee will likely apply.

Rates can vary so it pays to shop around for the best term deposit rate for the period that suits you. Several term deposit comparison websites can help. Also, depending on the sum you'd like to invest, you may be able to negotiate directly with the bank, credit union or building society for a 'special' interest rate.

Opening and operating bank accounts

Once you've decided on what account suits you, you can open one online, in bank branches, or over the phone. Either way, you will need to provide identification papers before you can fully operate the account.


This article covers general information about Opening a new bank account , and doesn't take your individual circumstances into account. Please use it as a guide only.