How to Open a Savings Account in Australia: A Step-by-Step Guide
Opening a savings account is a fundamental step towards managing your finances effectively. Whether you're saving for a down payment on a house, a holiday, or simply building a financial safety net, a savings account provides a secure place to store your money and potentially earn interest. This guide will walk you through the process of opening a savings account in Australia, covering everything you need to know from eligibility requirements to activating your new account.
1. Eligibility Requirements and Identification
Before you start the application process, it's important to understand the basic eligibility requirements for opening a savings account in Australia. Generally, you'll need to meet the following criteria:
Age: You must be at least 18 years old to open an account independently. Individuals under 18 may be able to open a joint account with a parent or guardian.
Residency: You typically need to be an Australian resident. Some banks may offer accounts to non-residents, but the requirements and options may differ.
Identification: You will need to provide valid identification documents to verify your identity. This is a legal requirement under Australian anti-money laundering laws.
Acceptable Forms of Identification
Banks and financial institutions in Australia require you to provide identification documents to comply with the Financial Transactions Reports Act 1988. The most common forms of identification accepted include:
Australian Driver's Licence: A current and valid Australian driver's licence is widely accepted.
Australian Passport: An Australian passport is another primary form of identification.
Proof of Age Card: A government-issued proof of age card can be used.
Medicare Card: While not always accepted as primary ID, a Medicare card can be used as a supplementary document.
Foreign Passport: If you're not an Australian citizen, a foreign passport with a valid visa is usually required.
Banks often use a points-based system to verify your identity. You might need to provide a combination of primary and secondary identification documents to reach the required point score. Check with the specific bank for their accepted forms of ID and point requirements.
2. Choosing the Right Account
Selecting the right savings account is crucial to maximising your savings potential. Consider the following factors when making your decision:
Interest Rates: Compare interest rates offered by different banks and account types. Look for accounts with competitive rates, but also be aware of any conditions attached, such as bonus interest requirements.
Fees: Check for any account-keeping fees, transaction fees, or other charges. Some accounts may waive fees if you meet certain conditions, such as maintaining a minimum balance.
Access to Funds: Consider how easily you need to access your money. Some accounts may restrict withdrawals or charge fees for frequent transactions. If you need easy access, an online savings account with instant transfers might be suitable. Savings-accounts can help you compare different account features.
Bonus Interest: Many savings accounts offer bonus interest if you meet specific criteria, such as making regular deposits and not making any withdrawals during the month. Understand the requirements to maximise your earnings.
Account Features: Some accounts may offer additional features, such as linked transaction accounts, budgeting tools, or rewards programmes. Consider which features are important to you.
Types of Savings Accounts
Here are some common types of savings accounts available in Australia:
Online Savings Accounts: These accounts typically offer higher interest rates than traditional savings accounts but may have limited branch access. They are often managed online or through a mobile app.
Bonus Saver Accounts: These accounts offer bonus interest rates if you meet certain conditions, such as making regular deposits and not making withdrawals.
Everyday Savings Accounts: These accounts are linked to a transaction account and offer easy access to your funds. They typically have lower interest rates than other types of savings accounts.
Term Deposits: With term deposits, you deposit a fixed amount of money for a fixed period and earn a guaranteed interest rate. You cannot access your funds until the term expires without incurring a penalty.
3. Completing the Application Form
Once you've chosen the right savings account, the next step is to complete the application form. You can usually apply online, in person at a bank branch, or by mail. Applying online is generally the quickest and easiest option.
The application form will typically ask for the following information:
Personal Details: Your full name, date of birth, address, and contact information.
Identification Details: Information from your identification documents, such as your driver's licence number or passport number.
Tax File Number (TFN): Providing your TFN is not mandatory, but it can help you avoid paying higher rates of tax on the interest you earn. If you choose not to provide your TFN, the bank will withhold tax at the highest marginal rate.
Employment Details: Your occupation and employer's name.
Source of Funds: Information about where the money you're depositing is coming from.
Nominated Account: Details of an existing bank account that you will use to transfer funds to and from your new savings account.
Be sure to provide accurate and up-to-date information on the application form. Any errors or omissions could delay the processing of your application.
4. Providing Necessary Documentation
In addition to completing the application form, you'll need to provide copies of your identification documents to verify your identity. The specific documents required will vary depending on the bank and the type of account you're opening. However, you'll generally need to provide at least one primary form of identification and one secondary form of identification.
If you're applying online, you may be able to upload scanned copies or photos of your documents. If you're applying in person, you can simply present your original documents to the bank staff. Make sure the copies are clear and legible. Banks have strict requirements for document quality to prevent fraud. Learn more about Savings-accounts and our commitment to secure financial practices.
5. Verifying Your Identity
Banks in Australia are required to verify your identity to comply with anti-money laundering laws. This process may involve:
Checking your identification documents: The bank will verify that your identification documents are valid and authentic.
Performing a credit check: The bank may perform a credit check to verify your identity and assess your creditworthiness. This is more common for accounts with overdraft facilities or credit cards.
Using online identity verification services: Some banks use online identity verification services to verify your identity electronically. This may involve answering a series of questions based on your credit history or other personal information.
Requesting additional documentation: In some cases, the bank may request additional documentation to verify your identity, such as a utility bill or a bank statement.
If you're applying online, the bank may use facial recognition technology to compare your photo ID with a live selfie. This helps to prevent identity fraud. Be prepared to follow the instructions carefully and ensure good lighting for the selfie.
6. Activating Your Account
Once your application has been approved and your identity has been verified, the bank will activate your account. You will typically receive a welcome pack with your account details, including your account number, BSB number, and any login details for online banking.
To activate your account, you may need to:
Make an initial deposit: Some banks require you to make an initial deposit to activate your account. This can be done online, in person at a bank branch, or by mail.
Set up online banking: If you want to access your account online, you'll need to set up online banking. This usually involves creating a username and password and setting up security questions.
Order a debit card: If you want to use a debit card to access your funds, you'll need to order one from the bank. The card will be mailed to your address.
Once your account is activated, you can start using it to save money and earn interest. Remember to regularly review your account statements and monitor your transactions to ensure that everything is in order. If you have any frequently asked questions, our website provides comprehensive answers. Consider what we offer in terms of resources and support to help you manage your new savings account effectively.