(Last updated March 2025)
ATM Fees: The Cost of Withdrawing Cash
Even though big banks dropped their $2 ATM withdrawal fees for other banks’ customers back in 2017, using the “wrong” ATM can still cost you. Today, the real sting comes from independent ATMs – the ones you find in convenience stores, pubs, or remote areas. These privately-owned machines often slap on a surcharge of around $2 to $3 per withdrawal, and in some cases as high as $4 or $5. You’ll usually see a warning on the screen (e.g. “This ATM will charge $2.50 for this transaction”) giving you a chance to cancel. If you proceed, the fee gets added to the amount you withdraw.
International ATM withdrawals are even pricier. When you use your Aussie debit card overseas, your home bank might charge its own fee on top of the foreign ATM’s surcharge. For example, Commonwealth Bank (CBA) adds $5 per withdrawal plus 3.5% of the amount for cash pulled from a non-CBA overseas ATM. Westpac and ANZ similarly charge around $5 per overseas ATM withdrawal (waived if you find one of their global partner ATMs). These fees hit your account immediately and are on top of whatever the local ATM operator charges (which could be another few dollars).
How to avoid ATM fees: Stick to ATMs in your bank’s network whenever possible. In Australia, the major banks (CBA, Westpac, NAB, ANZ) let each other’s customers use their ATMs for free, so you shouldn’t pay anything if you use a big bank ATM. If you need cash and only an independent ATM is around, consider getting cash out at a supermarket checkout or pharmacy instead (many offer eftpos cash-out with no fee). When overseas, plan ahead: withdraw larger amounts less frequently to minimise per-withdrawal fees, or choose a bank account that reimburses international ATM fees. Some digital banks now charge no ATM fees at all – for example, Up Bank lets you withdraw cash overseas with no extra charge on their side(though the foreign ATM owner might still charge a local fee). UBank and other neobanks also don’t impose their own ATM fees. Using those for travel can save you the $5 per pop that traditional banks charge. The key is to be mindful: check the screen for any fee notice before you hit “Yes” on an ATM transaction.
International Transaction Fees: The Forex Surcharge
In our increasingly global digital life, it’s common to shop from overseas websites or use your card on an overseas trip. But if you use your regular Australian debit card or credit card, you’ll likely encounter the international transaction fee (also called a foreign currency conversion fee). This fee is usually a percentage markup on the transaction amount whenever you transact in a foreign currency or use an overseas-based service. Most Australian banks charge around 3% of the transaction value as a forex fee. For instance, if you spent the equivalent of AU$100 abroad, you’d pay about $3 in fees just for the currency conversion. The Commonwealth Bank’s standard debit card, for example, charges 3.5% on any purchase in a foreign currency. Westpac and ANZ are around 3%. These percentages apply to both in-person overseas card purchases and things like online shopping where the merchant is overseas. (In fact, you can even get hit with this fee when paying in AUD if the retailer processes payments overseas – a common trap with some online stores.) That means a $200 online order from an overseas site could quietly rack up an extra $6 fee on your bank statement.
Why do banks charge this? It’s partly to cover the cost of currency conversion through Visa/Mastercard, but also because it’s an easy revenue stream that many customers overlook. The fee often gets lumped into the transaction total on your statement, making it a “hidden” cost of buying things from overseas.
How to avoid or minimise international fees: The simplest way is to use cards that don’t charge them. A number of Australian digital banks and neobanks offer $0 foreign transaction fees on their debit cards. For example, Up Everyday, UBank Spend, Macquarie Transaction Account, and others charge no conversion fees and use the standard Visa/Mastercard exchange rate. If you use one of those cards for online shopping or travel, that ~3% surcharge disappears. Another strategy is to consider travel cards or credit cards designed for overseas use, which often have no foreign fees. If you prefer to stick with your current bank, you could limit the damage by only using your card overseas for larger purchases and using cash (withdrawn in bulk to minimise ATM fees) for smaller daily transactions. However, with so many fee-free options available now, many Aussies simply keep a no-forex-fee card in their wallet for any non-AUD payments. It’s an easy way to save 3% on all your international spend. Bottom line: if you regularly shop in foreign currency or travel, it pays to get a card with no international fee, or you’ll continue to lose a few cents on every dollar to your bank.
Monthly Account-Keeping Fees (and How to Dodge Them)
Paying a monthly account-keeping fee on a transaction account used to be the norm in Australia – and many people still unknowingly pay these fees. This is the fixed charge your bank might deduct each month just for having the account open (often around $4 to $6). Among the Big Four banks, typical everyday accounts charge $4–$5 per month, unless you meet certain waiver criteria. For example, Commonwealth Bank’s Smart Access account has a $4 monthly fee, while Westpac Choice and ANZ Access Advantage charge $5 per month. These fees are usually waived if you deposit a regular amount each month (commonly $2,000, roughly equivalent to having your salary paid in) or if you meet other conditions like being a student or under a certain age. Banks often quietly auto-waive the fee once you fulfil the criteria, but if you forget (say one month you don’t deposit enough), you’ll see that $4 or $5 charge tick up.
Savings accounts generally don’t charge monthly fees (they profit from paying you lower interest instead), so the account-keeping fee mainly applies to everyday transaction accounts. Keep an eye out for the exact terms: some accounts have no monthly fee at all (NAB’s Classic Banking has $0 monthly fee with no conditions), and most neobanks also boast zero monthly fees as a selling point.
How to avoid monthly fees: The good news is these fees are very avoidable. First, check if you’re eligible for an exemption – e.g. under 25 or a student (many banks waive fees for students/under-30s). Otherwise, setting up a direct deposit of your paycheck into the account will usually meet the monthly deposit requirement (typically $2k) and waive the fee. If that’s not feasible, consider switching to a bank that doesn’t charge any account fees by default. Several banks (including NAB, ING, UBank, and others) offer everyday accounts with no account-keeping fees at all, no conditions attached. It’s also worth periodically reviewing your accounts – you might be paying for an account you don’t use much. If so, either close it or downgrade to a fee-free option. Banks won’t usually notify you that you could avoid fees; it’s on you to take action. A five-minute call or online application to switch accounts can save you $60+ a year in needless fees.
Inactivity and Dormant Account Fees
One of the sneakier charges out there is the inactivity fee (also known as a dormant account fee). This isn’t charged by all institutions, but it can catch you off guard. Essentially, if your account hasn’t had any deposits or withdrawals for a long period (often 12 months or more), some banks will start charging a small monthly fee until activity resumes or the account is closed. It sounds unfair – and it often is, since the money just sits there – but the fee is usually meant to cover the administrative cost of maintaining an idle account.
For example, some smaller banks and credit unions apply a dormant account fee of around $5 per month once an account has been inactive for over a year. In addition, an administration fee (e.g. $15) might be charged at the point the account is classified as dormant. Among the big banks, explicit inactivity fees are less common on standard accounts, but it’s worth checking the fine print. ANZ’s terms for certain accounts note a dormant account fee (historically around $7) could apply after 12 months of no activity. Generally, after 7 years of complete inactivity, Australian banks will transfer balances under $500 to the government as unclaimed money (as required by law), but you don’t want to lose a chunk of your balance to fees in the interim.
How to avoid inactivity fees: The simplest way is to keep your account active. If you have an account you rarely use, make a small transaction every now and then (even just transferring $1 in or out) to reset the inactivity clock. Better yet, if you no longer need the account, officially close it so it can’t incur any fees. Many people forget about an old savings account or an online account from a neobank trial, only to find it quietly accumulated fees while dormant. Do an audit of your accounts once a year – if you find an unnecessary account, transfer out the balance and shut it down properly. This not only stops any dormant fees, but also protects you from security risks associated with forgotten accounts. If for some reason you want to keep an account open without using it (say it’s an account with special benefits), contact your bank; sometimes they can waive or refund a dormant fee as a courtesy if you ask, especially if you remain a customer elsewhere. The key is not to “set and forget” any account that has funds in it. A minute spent making a quick transfer or payment can save you a month’s fee that gives you nothing in return.
Major Banks vs Neobanks: Who’s Sneaking in Fees?
It’s worth comparing how the traditional big banks stack up against Australia’s newer digital banks when it comes to these hidden fees. The Big Four banks (CommBank, Westpac, NAB, ANZ) have long lists of fees in their product disclosure documents – however, they often waive or reduce many of them if you meet certain criteria. For example, all Big Four banks will waive monthly account fees if you deposit a sufficient amount each month or qualify under a concession (age, student status, etc.). They also all abolished domestic ATM fees for each other’s ATMs, meaning you can use any major bank ATM in Australia without a direct charge. That said, they still impose overseas fees (3% foreign transaction fees and $5 ATM withdrawal fees) fairly uniformly. In addition, big banks may charge for “extras” like branch services (CommBank now charges $3 for a staff-assisted withdrawal in a branch) or dishonour/overdrawn fees ($10–$15 if a direct debit bounces or your account goes negative). These can be considered hidden costs if you’re not aware of them until they happen.
Neobanks and online-only banks, on the other hand, market themselves as fee-free alternatives. UBank plainly states “We don’t charge any fees” on its transaction account. Up Bank similarly has no account fees and no international fees – they even use the slogan “no extra fees” for overseas usage, passing on the Mastercard exchange rate with no markup. Many of these challengers don’t charge foreign ATM fees either (or they’ve abolished them recently to stay competitive). This makes neobanks very attractive for fee-conscious customers. It’s worth noting, however, that third-party charges can still apply when using these accounts. For instance, if an overseas ATM itself charges $3, you’ll still pay that – it’s just that your bank (Up, UBank, etc.) won’t add anything on top. Also, neobanks don’t have their own ATM networks, so they rely on you using other banks’ ATMs for free. Thankfully, in Australia that’s easy since most major bank ATMs are free to use; just avoid standalone private ATMs.
In summary, major banks often have more types of fees (due to a legacy of complex account offerings), but they can be avoided with the right behaviours (meeting deposit conditions, staying in-network, etc.). Neobanks come with a simpler, cleaner fee structure – usually no monthly fees, no foreign fees – which can eliminate many of the common charges outright. Just remember that “no fees” doesn’t cover things like international ATM operator surcharges or unusual costs (e.g. a replacement card courier overseas). Both types of banks are regulated the same way in Australia, so your deposits are safe either way; choosing one often comes down to whether you value the brick-and-mortar services of a big bank or the streamlined, low-fee approach of a digital bank.
Practical Tips to Minimise Fees
Staying fee-free is all about being proactive and informed. Here are some practical tips to help you avoid the most common charges:
- Use Bank ATMs or Cash-Out: Plan your cash needs so you can withdraw from a major bank ATM (which won’t charge you) or get cash out at supermarkets. Steer clear of independent ATMs unless it’s an emergency – those convenience fees add up quickly. If you must use one, withdrawing a larger amount once is better than multiple small withdrawals, to pay the fee only once.
- Choose the Right Card for Overseas: When shopping online from overseas or travelling, use a card with no international transaction fees. This could be a debit card from a neobank (e.g. Up, UBank, ING with conditions) or a specialty travel credit card. It can save you ~3% on every purchase. Also, avoid Dynamic Currency Conversion (DCC) when offered – always opt to pay in the local currency, as paying in AUD overseas often hides a worse exchange rate fee by the merchant.
- Meet Waiver Conditions: If your account has a monthly fee, set up habits to get it waived. For example, have your salary or a $2,000 deposit automatically go into that account each month. Schedule it like a bill to yourself. And if you’re under 30 or a student, ensure your bank knows – you may qualify for an automatic fee waiver.
- Keep an Eye on Statements: Make it a routine to review your bank statements or app notifications. Banks are required to clearly list fees on your statement. If you see a charge you don’t recognise (e.g. “Monthly service fee” or “Intl TXN Fee”), investigate it. This awareness alone helps you pinpoint which behaviours caused a fee, so you can adjust next time (or call the bank and ask for a goodwill reversal, which sometimes works for a one-off fee).
- Close or Combine Unused Accounts: Dormant accounts are not only a security risk but can also incur inactivity fees at some institutions. If you have multiple accounts, consider consolidating to one good transaction account and one savings account, and closing extras. No more forgotten accounts means no more surprise fees.
- Leverage Bank Alerts: Many banking apps let you set up alerts for when your balance drops below a certain amount. This can prevent overdrafts and the nasty $10–$15 overdrawn fees that come with them. Similarly, you can often get alerts for large fees charged. Use these tools so you’re never caught off guard.
By implementing these steps, you can significantly reduce what you pay in bank fees without sacrificing your day-to-day banking needs. Remember that in today’s banking landscape, competition is strong – if one bank is slugging you with fees and not offering value, there are plenty of others (including digital banks) that would be happy to take you on with a no-fee promise.
Conclusion: Take Charge of Your Banking Fees
Hidden fees don’t have to be an inevitable part of banking. By knowing what to watch for, you can outsmart the sneaky charges that Australian banks (digital or traditional) might throw at you. We’ve seen that ATM fees, foreign transaction fees, account-keeping fees, and inactivity charges are all manageable with a bit of planning and the right choice of account. The power ultimately lies with you as a customer – banks rely on inertia and lack of awareness, but now you’re equipped with the knowledge to break that cycle.
Key takeaways: Always read the fine print on fees when opening an account (or review your current account’s terms if you haven’t in a while). Take advantage of fee-free features and accounts – they’re more common now than ever. Plan your ATM usage and international spending to sidestep extra costs. And don’t be afraid to switch banks if your current one isn’t meeting your needs in a fair way; loyalty shouldn’t cost you money. With a friendly nudge here and a smart decision there, you can enjoy your transaction and savings accounts without the drip of hidden fees. Happy banking, and enjoy keeping more of your money in your pocket, where it belongs!
Sources: Recent fee schedules and consumer resources were reviewed to ensure all information (fees, charges, and conditions) is accurate as of March 2025. These include official bank fee listings and independent comparisons from CHOICE and Finder, as cited throughout the guide.
Sources
westpac.com.au (https://www.westpac.com.au/personal-banking/bank-accounts/transaction/choice/)
anz.com (https://www.anz.com/content/dam/cookislands/pdf/anz-fees-and-charges.pdf)
choice.com.au (https://www.choice.com.au/travel/money/travel-money/articles/bank-charges-overseas-transaction)
commbank.com.au (https://www.commbank.com.au/banking/everyday-account-smart-access/rates-fees.html)
movebank.com.au (https://www.movebank.com.au/tools-support/fees-charges/)
ubank.com.au (https://www.ubank.com.au/banking/transaction-account)
up.com.au (https://up.com.au/bank-overseas-without-the-fees/)
