Transaction account fees

Your everyday banking account probably charges you either a monthly base fee, transaction fees or both. Transaction fees cover services such as using an ATM, paying by eftpos, or making automatic payments or direct debits. They also include manual transactions involving a staff member – either in a branch or over the phone.

These accounts may also hit you up for other services, such as changing an automatic payment, text-messaging services, or arranging an overdraft facility.

Banks typically charge dishonour or penalty fees when an automatic payment or direct debit fails, or fees when an account goes into unapproved overdraft.

Fee exemptions

Ask if you qualify for any fee exemptions – the bank will ditch these charges if you meet certain criteria.

If you have a mortgage with your bank, you should be able to haggle to pay no fees. You should also be exempt if you have term deposits or a decent amount of savings. Regular deposits or minimum monthly account balances can also strengthen your case to get fees scrapped.

You may also get an exemption if you’re a child, student, new graduate, new to the workforce or are over 65. Sometimes these come with a proviso, such as having your NZ Super payments paid into your account.

Tips for avoiding fees

Our tips for avoiding monthly and transaction fees:

1. Lots of business: some banks ditch account fees if you have other business with them, such as a mortgage and term deposit. The level of business required varies with the bank.
2. Certain revolving-credit mortgages: with these home loans, your income is credited directly into the account. This reduces your interest bill and helps pay the loan off faster. You use this account to do your everyday banking, but some have a monthly fee or transaction fees.
3. High-balance accounts: most banks offer at least one everyday account that has no base or transaction fees if you maintain a minimum balance – typically $4000 or $5000, or if you keep your transactions below a certain number each month. Most of these accounts also pay interest on the balance.
4. The golden age: if you’re over 65 you shouldn’t be paying monthly base fees or transaction fees. A condition may be to have your super payments direct-credited into your account.
   
5. Children and students: if you’re under 19, in tertiary study, or recently graduated most banks can offer you a fee-free account.
6. Play your cards right: you may pay a fee every time you use your eftpos card, but nothing when you use your credit card. However, if you’re using your credit card, you’ll need to pay it in full and on time every month to avoid being hit with high interest rates.
   
7. Go online: most banks charge hefty fees when you do business in the branch. Using online banking is an easy way for you to avoid charges.