Last year, Australia's Big Four recorded a total $29.6 billion in profits, according to KPMG. Banks get rich by selling money itself (at a higher rate than they 'paid' for it), but also through fees you may not even notice.
The multitude of major bank fees might surprise you, but there are also changes you can make to avoid paying them – primarily, by avoiding the culprit altogether and switching to a customer-owned banking option.
Endless fees charged by the Big Four
- ATM fees – At least banks have the courtesy to warn you about this one. For CAPE members, all ATM transactions are direct charge-free, however some owners of ATMs may still levy a fee directly. To avoid this fee, use your CAPE card at a NAB ATM or RediATM.
- Cash deposit fees – It used to be that the Big Four would only rip you off when you needed to borrow. Now they're hitting customers for depositing money too with fees on deposits over a certain amount. At CAPE, over the counter transactions are free.
- Loan fees – most of the Big Banks charge a monthly fee on loans, as well as a hefty establishment fee and hidden fees such as early payout fees. Here at CAPE, whilst we do charge a small establishment fee, there are no ongoing fees and you won;t be penalised for paying out a loan early.
This list just scratches the surface of some of the exorbitant fees the Big Four have used to rake in equally exorbitant profits. What are customers to do? While watching your account and disputing any fees can go some way, avoiding the banks altogether is a much sounder solution.
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How credit unions are different
Commonwealth, NAB, Westpac and ANZ are out there to make the largest profits they can. They need money to pay huge bonuses and salaries, build luxurious branches, and keep an ATM on every street corner in Australia. That gets expensive and fees keep the ball rolling.
We can assure you that our structure lends itself to an honest, transparent system.
Credit unions are different. There seems to be a penchant on "being different' ever since it became clear that banking was broken in 2007, but we can assure you that our structure lends itself to an honest, transparent system.
Our primary purpose is to serve our members. That's because we are actually owned by our customers. Credit unions are governed by boards made up of elected officials, and we do not pay dividends to shareholders like the banks do.
Because of this key difference, we return profits back to our customers in a range of ways, including:
- Lower interest rates on loans…
- … but higher interest accrued on savings and other deposits
- Lower fees on mortgages and other loans
If this sounds better to you than paying to keep bankers' pockets full, we urge you to reach out to our team at CAPE CU about making the switch to a customer-owned banking. We're glad to walk you through every step of the way.