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Resources
Choice website has The low-down on penalty fees:
How to avoid dishonour, late payment, over-limit and other bank penalties and fees.
QUICK TIP
Whether you live near a regional centre or live in a remote community, you can make small changes to the way you do your daily banking and start saving on service fees today!
You would be surprised how quickly those service fees add up to one big bill, at the end of each month!
REMEMBER!
Non-bank ATMs are usually the ATMs available in your community. If you have to use an ATM that isn't your bank's, try drawing out all the money you will need for the week, or for the next few days, at ONE TIME. It can help you cut down on bank fees!
You can find out how much you are paying in service fees, by asking your bank agency or post office bank worker.
Your bank can also provide you with info about the type of bank account you have and the fees associated. |
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'Service Fees' and other types of Banking Fees
Recently, ICAN worked with a family who were being charged $300.00/per month in dishonour and over-withdrawn fees to their bank account. These high fees resulted from several direct debit payments going haywire. The moment that there was not enough money left in the account to cover a direct debit payment, is the moment the family started experiencing problems with bank fees. Before they knew it, the family owed $3,000.00 in fees alone.
This problem (outlined above) is not an isolated incident. Many persons have felt the sting of bank fees in one form or another. Have you ever checked your bank account to suddenly find you have been charged $20.00, $30.00, even $70.00 in fees and not even known why you were charged so much money?
There are four basic fees that you will see on your bank statements: service fees when withdrawing money, account balance fees, dishonour fees and over-withdrawn fees. It’s important to understand how fees are charged to your bank account so you can keep them to a minimum and keep more money in your account.
Service fees are the amount of money you pay each time you use a "service" offered by the bank. Every bank is different, so every bank will probably charge you a different fee for using their services. There are some standards that apply to service fees that we will look at here.
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Using EFTPOS (Electronic Funds Transfer Point of Sale) is usually much cheaper than using an ATM (Automatic Teller Machine) service to take out money. EFTPOS services are usually available at your local shop and if you are making a purchase, you can take out extra money.
Fees for using EFTPOS usually average around $0.50 - $0.60 cents, whereas fees for using an ATM usually depend on what type of ATM you use. |
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| For example, if you use your own bank’s ATM, you will not usually be charged a fee. If you use an ATM that is a private service and not one belonging to a bank, like a "Cash Card ATM", you will be paying for using that service. The cost of using a non-bank ATM can range from $1.00 - $2.50, on top of the fees that your bank will charge you for not using their ATM. |
Account balance fees usually incur a $1.00 - $3.00 fee every time you use an ATM machine that is not your own banks’. ICAN often sees fees rack up on people’s accounts when people check the balance of their account using an ATM when there is no money in their account.
This often happens on pay day morning when people may be waiting for their pay to be deposited into their account. The fees can get much higher if you are checking your balance from an ATM that is not your bank's ATM. |
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Dishonour and over-withdrawn fees are perhaps the most expensive of all bank fees. These fees usually occur when a person has set up a direct debit facility for making payments on a regular time schedule. The dishonour fee incurs when there is not enough money left in the bank account and the payment is scheduled to be taken out by direct debit. The over-withdrawn fee occurs when there is not enough money left in the account to cover the direct debit payment and the bank lets it go through anyway, over-drawing your account. At $20.00 - $35.00 each, the cost of such fees is high, depending on the type of bank account you hold.
All of these fees can start to add up to a lot of money. Let's look at how you can start saving on bank fees. Here are some helpful tips to cut down on fees:
| • Banks offer many different types of accounts, to suit your needs. If you use your bank account every day, you can find an account that fits with your needs. There are even fee-free accounts available for children, students and pensioners. |
| • Use EFTPOS to take out money when you can. |
| • Use your own bank's ATM when you can. Usually this is not offered in remote Aboriginal and Torres Strait Island communities, so it's best to use ATMs available there, only once a week or when you really need to. |
| • Check your account balance sparingly. You can set up telephone or internet banking for easy access to your bank balance. In remote communities where internet banking may not be accessible, you can use telephone banking by calling up your bank on their 1300 number instead of using ATMs which may add high fees to your account. |
| • If you have a direct debit payment agreement set up to make payments, make sure that you have money in your bank account. You must have enough money to cover those payments. |
Your bank can give you advice on what type of account is best suited to your needs, so you can reduce your fees. |
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