Banking can be confusing – but it is an important part of life! 

Understanding how to manage your bank accounts, pick the right bank, and stay safe when banking online will help grow your financial literacy and save you money. 

What are bank accounts? 

People put their money into a bank to keep it safe. Having stacks of cash lying around isn’t the best idea – you might lose them or lose track of how much you have. 

There are different types of bank accounts such as spending and savings. Spending accounts are everyday accounts that you can use for paying bills, withdrawing cash, or receiving income. These accounts are often attached to a debit card to help you spend money. A debit card is a card that you can use (physically or electronically) that lets you spend the money that is in your account. A credit card is connected to the bank’s money that you can spend but will have to pay back. 

Savings accounts are a bit different to a spending account, they are designed to help you save money. Some earn you more interest the more you add to them, giving you an incentive to put money in and not spend it! Separating your money into different accounts is a good way to keep track of how much money you are spending and how much you are saving. Banks can help you set savings goals and track your progress. 

How to choose an ethical bank

Choosing what back to set up your accounts with can be a tough choice. There is a lot to consider: how user-friendly is their online banking system? What are their fees and interest rates like? And (in my opinion) most importantly what are they spending my money on? 

Banks invest the money you keep with them meaning that choosing what bank you are with is very important. Many of the major banks invest in industries that are harming the planet, like fossil fuels and mining. For example, ANZ has invested 13,978 million dollars in the fossil fuel industry since 2016. Look at the amount that the rest of the major banks have invested here. 

Ethical banks such as Bendigo Bank, Bank Australia, Up, and Heritage Bank, all invest in companies that help our planet rather than harm it. When you are choosing where to keep your money, what your money is going to be used for is an important consideration. 

Some things to think about when making your decision are: 

• Does this bank’s values align with my own?
• How do the fees and interest rates compare to other banks?
• Does this bank have convenient and usable services, like an easy-to-use app and an appropriate amount of time when I transfer money?

What is online banking? 

Online banking makes it simple to do your banking at any time of the day or night. There are a lot of advantages to online banking: it’s fast, easy, and you can do it almost anywhere on your computer or phone. Online banking uses your real money, so it’s important to make sure you keep your account as secure as possible.

How do I keep my money safe online?

Here are some tips to make sure your banking is secure:

• Keep your passwords safe
• Do not give your passwords to anyone else
• If you write down your passwords, don’t keep them with your phone or computer
• Have a password on your computer and a passcode on your phone to keep them extra secure
• Don’t use a public computer or public network to access your banking
• Always sign out when you finish your banking
• If you receive account updates on your phone, delete them after reading them
• Record your receipt numbers — if something goes wrong with a transfer, you’ll have proof so your bank can help fix the problem

Check our MoneySmart Rookie for more tips

Be alert to scams

Look out for fake emails from your bank, also known as phishing. These emails (sometimes they even use texts or call you) can be really convincing, they might even have a fake website set up that looks exactly like the real thing. These scammers are trying to get your details so they can log in to your bank account and steal your money, and sometimes even your identity.

If you receive an email, text or phone call you aren’t sure about, don’t give away any information and don’t click on any links. You should contact your bank straight away and let them know what has happened. Check out MoneySmart’s page on phishing for more info and advice if you’ve been scammed.

Resolving issues

A mistaken transaction is when you make a mistake when typing in the BSB or account number, and your money ends up going to the wrong person or company. An unauthorised transaction is when someone uses your account to make a transaction when you haven’t said it was ok. If either of these things has happened to you, call your bank as soon as possible. They should be able to help you get your money back. For more info check out MoneySmart’s guide to unauthorised and mistaken transactions.

So now you know more about banking and can choose what bank is right for you!