Latest NewsMoney & Banking in Australia: The Complete Guide

Money & Banking in Australia: The Complete Guide

Managing your money and ensuring it is stored safely and securely in a bank account is crucial if you have decided to move to Australia. You’ll want to know about the most convenient banks, the process of setting up your account, and payment methods. We’ve got you covered. 

We will discuss everything you need to know about money & banking in Australia, together with some tips on managing your finances as an international student.

The Australian Currency

Photo by Melissa Walker Horn on Unsplash

The first Australian national currency was formed in 1910 based on the British currency of pounds, shillings, and pence. However, in 1966, a decimal currency system of dollars of cents was introduced. This system is used to this day and is known as the Australian dollar (AUD), the basic unit of the Australian currency, which is broken down into 100 cents. 

The Australian dollar is signed as “$”; however, it is also often signed as “A$” or “AU$” in order not to be mixed up with other dollar-denominated currencies such as the United States dollar.

Australian Dollar Coins

Due to Australia using a decimal currency system, you will only find six types of coins of the Australian dollar currency: the 5 cents, 10 cents, 20 cents, 50 cents, one-dollar, and two-dollar coins. 

The $1 and $2 coins are gold coloured, whereas the other coins are silver coloured. If you want to learn more about Australian coins and their history, you can check out the Royal Australian Mint website.

Australian Dollar Banknotes

There are five Australian types of banknotes available: $5, $10, $20, $50, and $100 banknotes. Each denomination has a different colour; the $5 Australian banknote is pink, the $10 note is blue, the $20 note is red, the $50 note is yellow, and the $100 banknote is green.

Rounding of Prices

Since the five-cent coin is the smallest denomination of the Australian currency, prices for products or services paid in cash are rounded up or down to the nearest five cents. For example, if you buy one kilogram of apples at Woolworths for $4.08, the price will be rounded up to $4.10. This only applies to paying with cash; therefore, if you use electronic transactions such as a debit or credit card, the price will not be rounded.

Banking in Australia

If you plan to live in Australia and especially if you want to work while staying here, having a bank account is crucial in order to have your wage deposited, pay bills, school fees, and other transactions. Opening a bank account and using it should not be a hassle; since most Australian banks allow you to do so even before arriving here and provide plenty of useful resources for their clients.

Types of Bank Accounts

There is a variety of choices when it comes to bank account options in Australia, which you can narrow down according to your needs. In general, there are two main types of bank accounts: everyday accounts (you may also know this type as a transaction or checking account) and savings accounts

You can use the everyday account for day-to-day transactions, having money transferred from your employer, and withdrawing money. Savings accounts, on the other hand, are intended for people who want to save money and potentially grow their savings through the higher interest rate that these accounts offer.

A majority of banks in Australia also offer various options, such as young adults and students’ accounts, accounts for concession card holders, pensioners’ accounts, and more. Each account is designed with specific needs in mind and offers different benefits that are worth considering.

Major Banks in Australia 

Although there is a wide range of banks in Australia, there are four major banks that a majority of Australians and visitors in the country use. These are:

  • Australia and New Zealand Banking Group (ANZ)
  • Commonwealth Bank of Australia (CBA)
  • National Australia Bank (NAB)
  • Westpac Banking Corporation

Other smaller but trusted banks that may offer account options that fit your needs include the Bank of Queensland, Bank of Melbourne, Bank of Adelaide, Bendigo Bank, Bankwest, HSBC, etc. You can independently research which bank account is best for you by considering the number of ATMs it has available, the fees it charges for various services, online banking features, ease of transferring or depositing money, etc.

Best Banks for Students

If you’re an international student in Australia, you can take advantage of the convenient student or student-friendly accounts that the major Australian banks offer:

  • Westpac – Westpac Choice for Tertiary Students
  • CBA – Student Bank Account
  • ANZ – Access Advantage 
  • NAB – Classic Banking account

How to Open an Australian Bank Account

Some Australian banks, such as the Commonwealth Bank of Australia, allow you to open an account before your arrival to Australia; however, you will need to verify your identity at the branch upon arriving. 

If you plan to open a bank account after landing in Australia, it is easiest to do so within six weeks of your arrival since all that is required for identification is your passport, student ID, and information on your tax residency (you may have to provide your Taxpayer Identification Number (TIN). After this period has passed, you may have to go undergo the 100 points ID check.

The 100-Point Identification Check

If more than six weeks have passed since your arrival in Australia, you may have to provide a total of 100 points of Australian or state-issued identification documents in order to open an Australian bank account. The 100-point system allocates points to different types of documents that prove your identity.

In order to prove your identity through the 100-point system, you will typically need to provide at least one of the primary photographic documents; or two non-photographic primary documents; or one of the non-photographic primary documents and one secondary identification document listed below.

Primary Photographic Identification Documents may include:

  • Valid Australian passport (or within two years after expiration)
  • Valid foreign passport
  • Australian driver’s licence
  • Foreign driver’s licence (with photo and full name)
  • Foreign national ID card
  • Proof of Age card (from an Australian state or territory)
  • Australian firearms/shooting/explosives licence

Primary Non-Photographic Identification Documents may include:

  • Australian or foreign birth certificate
  • Australian or foreign citizenship certificate
  • Australian pension/health care/seniors health card

Secondary Identification Documents may include:

  • Australian Medicare card
  • Foreign driver’s licence that does not contain a photograph
  • Australian marriage certificate
  • Australian Government card or notice issued by Centrelink to the concession holder
  • Australian Tax Office (ATO) assessment notice (issued within the last 12 months)
  • Australian School attendance letter issued by the principal (if you’re under 18)

For more information on identification requirements, check your bank’s website or contact a representative who can help you.

Accessing Money from an Australian Bank Account

Everyday (transaction) bank accounts in Australia are typically linked with a debit card, which you can use for payments and to withdraw cash from automatic teller machines (ATMs). 

Some banks also offer their own mobile applications, which you can use to withdraw cash without your card. Withdrawing money from ATMs is usually free if it’s from an ATM associated with your bank, but if it’s not, it may charge you a fee.

If you still haven’t set up your Australian bank account, you can still use your credit or debit card from your country since most ATMs recognise them. Withdrawing and sending money abroad will most likely involve fees and a currency exchange rate; therefore, keep this in mind and check your provider’s rates when using your international card.

Payment Methods in Australia

The most common payment method in Australia, both in-store and online, is through debit and credit cards. A majority of payments through cards are contactless and require a PIN at the $100 limit. Since some businesses only accept this type of payment, it is best to keep your card with you when you intend to purchase something. 

On the other hand, small businesses or stands may only accept cash instead; therefore, you may want to withdraw money for these cases. Other payment methods, such as Apple Pay and Google Pay, are also growing in popularity.

Transferring Money Abroad from Australia

There are various options if you want to transfer money abroad from your Australian bank account. The cheapest way to transfer money abroad is usually through money transfer companies, which move the money to the other person’s account, or they can collect the money in cash through a local agent or branch. 

Wire or SWIFT transfer through banks, that is, sending money directly from your bank account to someone else’s, is also an option. However, this type of transfer can charge a higher exchange rate and fee, as well as it may take up to five business days to go through. 

You can also use online applications such as PayPal or Wise, as they are both available in Australia. These may also charge cross-border fees or exchange fees depending on the country you will be sending money to; therefore, shop around whichever option is most convenient for you and the recipient.

Goods and Services Tax

The Goods and Services Tax (GTS) is a broad-based 10% tax that applies to most goods, services, and other items that are consumed and sold in Australia. These can include things you buy in supermarkets as well as dining out, with the exemption of basic food and other GTS-free sales

As a consumer and buyer, you will not need to calculate the tax yourself since businesses include it in the advertised price (with some rare exceptions). If you plan to open a business in Australia as a non-resident, we suggest consulting resources and information on the GTS from the Australian Taxation Office (ATO).

Tipping Culture in Australia

Unlike the United States, tipping in Australia is voluntary and not as big of a part of its culture. Since Australia enforces strong labour laws, including up-to-date minimum wage requirements, employers do not rely heavily on the tipping system. Therefore, while tipping is appreciated, it is not mandatory and done mostly in cases when the service is exceptional or when you want to slightly round up the price.

Managing Your Finances as an International Student in Australia

Nothing challenges your independence more than realising how difficult it is to manage your finances as an international student abroad. Challenging as it can be, it is also much easier to tackle once you learn how to budget and inspect your finances carefully. Here are some practical things to consider when you move to Australia:

  • Set up a local bank account. Opening an Australian bank account should be one of the first things on your checklist when it comes to good financial planning. Local bank accounts charge little to no fees on transactions within the country and account maintenance. Local Australian banks offer student accounts that are tailored to you and include cost-effective services that students typically need.
  • Live within your means. Once you have created a budget for your weekly or monthly expenses, stick to it. Calculate how much money you have to spend on essentials such as rent, groceries, and utilities first, and make non-essential purchases only if you have money left over. Debt accumulates over time, therefore, if you don’t have a plan in place to repay it later, it is best to avoid it.
  • Make the most out of student discounts and deals. Whether it’s subscriptions for online platforms and products, in-store discounts, public transportation concession cards, airlines, or any other types of student deals, make sure to make the most out of them. While they may not seem much at first, they can make a big difference in the long run when you realise the amount of money you have saved.
  • Consider working while studying. A lot of domestic and international students work part-time while studying in Australia. Part-time work not only helps you earn money and learn how to manage it; it also equips you with useful interpersonal and communication skills. These skills will come in handy when you graduate from university and start looking for jobs in your chosen career. Read our working while studying guide for more information on how many hours you can work as an international student and the type of jobs you can search for.

Budgeting, making sound financial decisions, and staying informed on how money and banking in Australia work can go a long way. Coming from another country, it is worth researching your choices when it comes to your bank account and purchases in order to avoid unnecessary expenses.

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