The big four
There are four major banks in Australia:
In addition to the ‘big four’ there are other regional, city and state banks and international banks. All banks are members of the Australian Bankers Association and you can find all their members on their website (http://www.bankers.asn.au)
Fees
It actually matters which bank you choose, so take your time choosing one. Obviously you can swap banks, but who wants that hassle when you migrating?
The most obvious choice to make is choosing between the “Big four” or a smaller, usually local, bank. This is most likely a personal preference. You might get cheaper services with the major banks, but you’ll get a more personal approach with a local bank.
The difference between the “Big four” banks is in the details: The interest rates vary and also the fees.
DO NOT UNDER ESTIMATE THE FEES.
Fees include:
- ATM (Automatic Teller Machines) fees, around $2,- per transaction
- Credit card fees, around $10,- per month
- Monthly account fees, around $10 per month
- Personal teller visits, around $10 per month extra
- Dishonesty fees (Negative balance), $30,- each
- International transfer fees, $20 each
- Etc.
As you can see banks tend to charge their customers for every pen they lift and because all four do it, there is no point arguing over that, unless you have some negotiating power, like a potential mortgage loan. So pay attention when comparing all the banking options and ask the fees involved when banking.
You can use ATMs of other banks, but the other bank will charge you a fee as well. There are ATM scattered all over the country so there is always one nearby.
Bank cheques
A bank cheque is a piece of paper you can get from your bank which can be used as a substitute for cash. The cheque is created by you and the bank employee and it can only be cashed by the, on the cheque, specified payee.
The amount of the bank cheque is reserved by the bank until the payee cashes the cheque, so the payee is guaranteed to receive the money from the bank.
If the cheque never gets collected, the money can be returned to the payer.
Stopping cheques
You can countermand a cheque (called “stopping” the cheque) at any time before it is presented for payment. You should ring the bank immediately, find out whether the bank wants you to fax a form, and take careful note of the name of the bank official you have spoken with. However, the best advice is to go to the bank and do it in person.
“Not negotiable” cheques
Most people “cross” their cheques and write the words “not negotiable” between the lines. This is a good idea because it tells the bank that the cheque should not be paid on demand, and must instead be paid into the account of the payee. This means the cheque will go through the clearing system and find its way to the payee’s account.
If the cheque is not crossed it is considered a legal “negotiable instrument” i.e. almost like cash, the amount named on the cheque can transferred on delivery to the bank.
Bank mistakes
If the bank does not follow your instructions as identified on the cheque, this would be considered a breach of the contract between the bank and yourself. This can be especially embarrassing in the context of a business relationship e.g. where the bank dishonours a cheque from a trader to a supplier. In these circumstances you may be able to recover damages or compensation.
Nevertheless, the banks (both collecting and paying) may have defences to a legal action, so it would be important to see a lawyer, especially if you think your reputation has suffered because the bank did not pay on the cheque.
Your mistakes
What happens if you make a mistake and the bank pays out on the cheque? If the mistake really was your own, then the bank will debit your account for the amount paid and you may have no recourse. For instance (and this can easily happen) if you write the amount in figures, leaving a space where that figure could be changed, and at the same time forget to fill in the amount in words. If someone then changes the figures to make it a higher amount (usually by adding zeroes) and fills out the corresponding amount in words, you could be in for a big shock.
If you discover that someone has forged your name (and yes, this does happen), you must notify the bank immediately.
You should remember to cross the cheque “not negotiable”, and never leave a space after the name of the payee or where the amount is written (no spaces at all, including before, after or in between any figures).
BPay
Somehow it’s not very common to transfer directly to other bank accounts to make payments. This is either done through direct debit, Bank Cheques or something called: “BPay”. BPay is a sub company that is owned by the four big banks and their directors are appointed by those four banks.
BPay is a system that is integrated into the banking services of the four banks, mainly in their website. It enables customers to manage their bill payments through that system.
From the BPay website:
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The BPAY Story
The launch of BPAY on November 18, 1997 was a global first: A single bill payment service adopted across the banking sector. Today, BPAY remains unique on the world stage as a distinctively Australian invention.
BPAY was set up to provide customers with a convenient and secure way to pay their bills and to create a more efficient collection service for billers and financial institutions.
In 10 years, BPAY has become the most popular bill payment service in Australia, with its characteristically bold ‘B’ logo, which symbolises ease, convenience and security.
Now, over 170 Australian financial institutions, ranging from banks to credit unions and covering about 90% of the consumer banking market, belong to the scheme. The scheme has also broadened consumer access to BPAY with a new membership category called a Payer Institution Member which is any Australian Institution that manages a store of value for customers, sponsored by a BPAY member that is an Authorised Deposit-taking institution under the Banking Act.
More than 16,000 biller codes covering companies, utilities and government departments now accept payment via BPAY, including Australia’s top billers. Each month, 18 million bills worth $11 billion are paid using BPAY, and more than 79% of these are paid over the internet.
BPAY started as an innovative and secure phone bill-paying scheme, and this cutting-edge approach to using technology has continued. It soon offered electronic bill payment via the Internet, than it introduced BPAY View to enhance the BPAY offer in January 2002.
BPAY View allows consumers to receive bills electronically, which they can then pay using BPAY. The service was designed to reduce costs for billers and to streamline bill collection services, while improving relationships with customers.
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A lot of fluff, but what it comes down to is that on the website of the bank, there is a “Bill payment” section and if the payee has a BPay number, you can use that number to identify the payee more easily.
The actual benefit in comparison to using the payee’s bank account number is not quite clear, to be honest, but the system seems to work.
Not all companies (like VicRoads for instance) use BPay. These are usually also the companies who are not willing to publicise their bank account number, so you’ll have to fall back to cash and bank cheques in those scenarios.
