How the Australian Banking System Works
Australia has one of the most concentrated and stable banking systems in the world. Four major banks — the Commonwealth Bank of Australia (CBA), Westpac, ANZ and National Australia Bank (NAB) — collectively hold approximately 80% of retail banking assets. Behind them sits a second tier of regional and mutual banks (Bendigo Bank, Bank of Queensland, Suncorp), a growing number of digital-only neobanks (Ubank, Up, ING Direct), and credit unions that serve specific industry or community groups.
For new arrivals and migrants, the practical questions are immediate and concrete: which bank to open with, how to do it, what identification is required, and how the system differs from home country banking. This guide addresses all of these.
Australia's banking infrastructure is robust. ATM networks are extensive in metropolitan areas; the EFTPOS system (electronic funds transfer at point of sale) is nearly universal — cash is increasingly optional for daily transactions.
Opening a Bank Account as a New Arrival
Australian banks allow new migrants and temporary residents to open accounts before arriving in Australia, under a simplified process available within the first 6 weeks of arrival. The Anti-Money Laundering and Counter-Terrorism Financing Act requires banks to verify customer identity, but the "special account opening" provisions for new arrivals relax the standard requirements during the initial settlement period.
To open an account before or shortly after arriving, you typically need your passport and visa evidence. A Tax File Number (TFN) is not required to open an account but is needed to avoid withholding tax on interest at the top marginal rate (47%). Apply for a TFN as soon as you have an Australian address — online through the ATO website, processed in 10–28 days.
Comparing the Major Banks
| Bank | Account Fees | ATM Network | Best For | Notes |
|---|---|---|---|---|
| Commonwealth Bank (CBA) | $0 (Smart Access) | Largest network | Everyday banking, new arrivals | Best digital app, largest branch network |
| ANZ | $0 (Plus account) | Extensive | International transfers, expats | Good international banking features |
| NAB | $0 (Classic Banking) | Extensive | Fee-free transactions | No foreign transaction fees on some accounts |
| Westpac | $0–$5/month | Extensive | Bundled products | Includes St George and Bank of Melbourne |
| ING Direct | $0 | ATM rebates | Savings rates | No branches; strong savings rates |
| Up Bank | $0 | ATM rebates | Digital-native users | App-first, good budgeting tools |
Transaction Accounts vs Savings Accounts
Australian bank accounts operate as either transaction accounts (everyday spending, linked to a debit card) or savings accounts (higher interest, restrictions on withdrawals). Most people hold both: a transaction account for daily spending connected to a Visa or Mastercard debit card, and a linked savings account where surplus money earns interest. In 2026, competitive savings rates range from 4.5% to 5.3% annual interest for at-call savings accounts at major and challenger banks, substantially higher than rates available in many comparable countries.
International Money Transfers
Sending money overseas through a bank is legal and straightforward but expensive. Banks typically charge a flat transfer fee ($10–25) plus an exchange rate margin of 2–4% above the mid-market rate. On a $5,000 transfer, the exchange rate margin alone can cost $100–200 more than specialist services.
Specialist transfer services — Wise (formerly TransferWise), OFX, Remitly — use rates much closer to the mid-market and charge fees of 0.3–1.5%. For any transfer above $1,000, using a specialist service rather than a bank is materially worth the additional step of registration. Both OFX and Wise are Australian financial services licensees regulated by ASIC.
Credit Cards in Australia
Credit cards in Australia operate on Visa, Mastercard and American Express networks. The market is competitive: rewards cards offer points on a points-per-dollar basis (Qantas, Velocity or Cashback programs), while low-rate cards prioritise a lower ongoing interest rate (typically 12–15% versus 19–22% on rewards cards). The credit card interest rate in Australia is higher than in comparable countries — a 0% balance transfer introductory offer is standard, but ongoing rates are high. The practical advice: pay the full balance each month if using rewards cards, or choose a low-rate card if you carry a balance. Annual fees on rewards cards range from $49 to $450 depending on the tier.
The EFTPOS and Payment System
Australia's point-of-sale payment infrastructure is among the most advanced in the world. EFTPOS — Australia's domestic electronic payments network — operates alongside Visa and Mastercard at virtually all retail locations. Tap-and-go (contactless) payment is standard on all debit and credit cards and is accepted at essentially all retail, hospitality and transport venues. Apple Pay and Google Pay work seamlessly. Cash is increasingly rare for daily transactions in Melbourne's inner city, though it remains accepted everywhere.
Frequently Asked Questions
Can I open a bank account before I arrive in Australia?
Yes — all four major banks offer pre-arrival account opening for people moving to Australia. The process involves completing an online application with your passport details and visa information, receiving account details before departure, and then presenting at a branch within a specified period (usually 6 weeks of arrival) to verify your identity in person and activate the account. CBA, ANZ, NAB and Westpac all offer this service. It allows you to have an Australian account number to provide to your employer before you arrive, which is genuinely useful for getting your first payroll payment without delay.
Do I need a credit history in Australia to get a mortgage?
Lenders assess borrowing capacity based on income, expenses, employment stability and credit history. New arrivals have no Australian credit history, which is not the same as bad credit — it means there is no negative history, but also no positive track record. Lenders typically treat new arrivals (particularly those with permanent residency and stable professional employment) without significant prejudice, assessing them primarily on income documentation and employment stability. Building a positive credit file in Australia takes 6–12 months of responsible account use (paying on time, not exceeding limits). Some lenders specifically cater to migrants and have adapted assessment processes for applicants with overseas income history.
How does superannuation interact with banking?
Superannuation is managed separately from your bank accounts — it is held in a superannuation fund (not a bank account) and is inaccessible until retirement age in most circumstances. Your employer pays contributions directly into your nominated super fund. You choose which fund receives your contributions (most large super funds accept members from any industry); if you do not nominate a fund, your employer's default fund is used. Major super funds include AustralianSuper, Australian Retirement Trust and UniSuper. You can consolidate multiple super accounts through the MyGov portal to avoid paying multiple sets of fees.