Savings accounts vs. transaction accounts

Whether you’re looking for a transaction account, savings account, or even both – it pays to know the differences. Here’s some information to help you figure out what works for you.

What is a transaction account?

A transaction account (sometimes called an everyday account) is a bank account used to pay for bills, shopping and everyday purchases, plus payments to and from other bank accounts. You can usually get one after turning 16 years old.

You’ll often get a debit card with your account too, which you can use to withdraw cash or pay for things. Most of us get our salaries paid directly into this account.

What to look for

Check that your account offers:

• A debit card that can be used online
• ATM access
• Internet banking access
• BPAY®
• Mobile app access
• Smartphone payments (Apple Pay, Google Pay and Samsung Pay)
• Pay ID
• Any special offers, discounts or deals – it’s always worth asking.

A word on fees

There’s often a small monthly fee to maintain your account. But you’ll find that some banks waive this fee if you deposit a certain amount in each month (like your salary).

Whilst most banks won’t charge you for electronic transfers or withdrawals from their own ATMs, it’s worth double-checking this before you open an account. It’s also worth checking if they charge a branch withdrawal fee or cheque deposit fee.

Online statements are usually free, but some banks charge for paper statements.

What is a savings account?

A savings account is designed to grow your money by accumulating interest on funds deposited. In other words, it encourages you to save money – rather than spend it.

This means you may not receive a debit card with a savings account. Instead, you’ll access and move your money into different accounts online, over the phone or via a mobile app. You can usually get a savings account after turning 16 years old, but some banks offer special accounts for kids too.

What to look for

Check that your account offers:

• A competitive interest rate that could grow your money quickly
• Any promotional interest rates, which may give you a higher interest rate for a limited period
• Any bonus interest rates, which may give you a higher interest rate if you don’t make withdrawals for a certain time, or if you deposit a minimum monthly amount.

You can find out more about our savings products here.

A word on fees

Some banks will charge you annual fees and withdrawal fees, while others waive these if you deposit a certain amount of money into the account each month.