What is a bank account?
A bank account is a safe and convenient way to store your money. Different types of accounts have different features. Some are useful for everyday spending like buying coffee and paying bills, while others are designed to help you grow short or long-term savings.
There are many different types of bank accounts available, and the right one for you is one that best helps you achieve your money goals. The two main types of bank accounts are everyday transaction accounts and savings accounts – one for spending and one for saving.
Understanding how different types of bank accounts work and how their features compare will make it easier to find the account that’s right for you.
Why do I need a bank account?
There are lots of reasons to open a bank account.
- You don’t need to carry cash for everyday purchases – instead, you can use your debit card or tap and pay on your phone.
- You can pay bills online.
- You’ll have a record of your spending, which can help you budget and manage your money.
- Your money is safe and secure, while cash can be more easily stolen, lost or damaged.
- Your spending and saving history will be useful when you apply for loans, like a home loan.
Transaction or everyday accounts
A transaction account (sometimes called an everyday account, or previously known as a checking account) is used for day-to-day expenses like paying bills, buying groceries or withdrawing cash. Transaction accounts suit a range of banking needs and can be used by kids, teens or students who are learning how to manage their own money. You can also link a debit card to your transaction account.
What to look for in a transaction account
Account keeping fees
Always check what types of fees an account may charge you. Some accounts have fees, or require you to deposit a certain amount each month to waive the fee. Some may also charge for monthly account statements.
The NAB Classic Banking account has no fees, and you can access up to seven years of online statements for free. Keep in mind that there is a monthly card fee if you link a NAB Platinum Visa Debit card to your account.
The NAB Classic Banking account does not charge overdrawn fees - however, you may be charged interest if your account is in the negative. Make sure you keep an eye on how much is in your account and have enough for automatic payments like direct debits.
How convenient it is to withdraw, deposit and pay
Check how easy it is to withdraw cash. Getting cash out at an ATM is convenient, and we have a large network of ATMs that don’t charge a fee if you’re a NAB customer. Keep in mind that some ATMs run by smaller third-party operators might still charge a fee for withdrawing cash. Also, check if you’ll be able to visit a branch or contact your bank on the phone if necessary.
Online banking features
Look for an account that offers online banking, so you can access your money on a computer or via an app whenever it suits you. You can also see if the account offers features like PayID and contactless payments.
Learn more about transaction accounts and how they work.
A savings account is for money you don’t plan to spend immediately but are putting towards a future goal, like a home deposit, holiday, an emergency fund or retirement. A savings account allows you to deposit money and earn interest on the balance in the account.
Types of savings accounts
Different savings accounts have different interest rates, conditions and features. Which account is right for you will depend on your savings goals.
Online savings account
An online savings account usually offers several features:
- easy to set up – can open an account and deposit funds the same day
- earn interest on the money in your account
- quickly transfer between accounts
- quick access to funds
- no monthly fees or minimum deposit.
The NAB iSaver gives you bonus interest on the balance of your account for the first four months.
Bonus savings account
A bonus savings account usually offers several features:
- bonus interest when certain conditions are met, which can help you reach your savings goals faster.
- a base interest rate. You’ll receive this amount of interest even if you take money out of the account.
The NAB Reward Saver has a tiered interest rate, so you get bonus interest each month when you make at least one deposit and no withdrawals.
Learn more about how savings accounts work.
A term deposit account allows you to lock money in an account for a fixed term. You earn interest on the balance as long as you don’t withdraw the money before the fixed term ends.
A term deposit is useful when saving for a larger purchase, like buying a car. Keep in mind that if you need to withdraw the money before the fixed term ends, you usually need to give 31 days notice. You’ll also earn less interest depending on how much time is left on your fixed term.
Learn more about the NAB Term Deposit.
Can I use my personal account for business?
If you run a business or have a side hustle, you should open a business bank account to track your business income and expenses.
Learn more about why you need a separate business bank account.
Related products and services
Terms and Conditions
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