Which of the Big Four Australian banks should I bank with?

Commonwealth vs Westpac vs NAB vs ANZ

Australia’s Big Four banks are Westpac, National Australia Bank (NAB), Commonwealth Bank and ANZ. They’re called the Big Four because they’re the four biggest banks in Australia, with, between them, the biggest market share.

They also hold most of the loans taken out in Australia and lots of Australian consumers do some, if not all, of their banking with one or more of these banks. Commonwealth Bank, also known as CommBank, is the largest of all, with ANZ being the oldest (established in 1835).

All four banks offer a wide range of financial products, including transaction accounts, savings accounts and term deposits, as well as a variety of car, home and personal loans. The four share the country’s largest ATM network and between them also hold around 90 per cent of Australia’s home loans.

What is the market share of the Big Four banks?

CommBank has the largest market share, with $139.2 billion of assets under management in 2017. NAB is the smallest, with $79.5 billion in 2017. While many people trust these banks much more than others with their money, it’s important to remember that all banks, redit unions and building societies in Australia are regulated by the Australian Prudential Regulation Authority (APRA). That means they all have to abide by the 1959 Banking Act.

Consumer deposits up to $250,000 are covered by the Government Guarantee, too, so if a bank collapses, your money, up to $250,000 is safe. The government guarantee covers all banks, credit unions and building societies who are registered as an “authorised deposit-taking institution”

Which of the Big Four is the best bank?

This question should be “Which of the Big Four banks is best for me?” as your ideal choice is mainly down to what your needs are. However, there are some differences between the four which might help you to make up your mind.

CommBank has the biggest ATM network in Australia, which will make accessing your cash easier. It’s also Australia’s largest bank, which means it’s arguably more stable.

NAB is the only bank out of the Big Four that doesn’t charge customers monthly fees to maintain accounts.

Westpac has the biggest overseas ATM network so you can use more than 50,000 ATMs around the world, for free, with the Westpac Global ATM Alliance.

The ANZ Bank has some innovative products and facilities for people who travel a lot or who deal with overseas currencies.

Commonwealth Bank, National Australia Bank and ANZ all offer Apple Pay for their credit and debit card customers.

You can research and compare transaction banking accounts in Australia here.

What about the interest rates?

Interest rates in banks for savings accounts are pretty low at the moment, but you can find some helpful rates still. The interest rate on your savings account is crucial because it determines how rapidly your money will grow.

When you’re looking for your best bank for savings account purposes, you need to look at the base variable rate to see which ones offer you the best value. The Big Four all offer savings accounts that pay bonus interest rates for fulfilling certain criteria. You might, when you compare high interest savings accounts, find that you have introductory rates for the first few months. If you plan well, you can surf these higher introductory rates to maintain good returns.

There’s the Westpac eSaver account, which has a maximum variable rate of 2.51 per cent for the first five months only, before it reverts to 0.50 per cent p.a. You get 24–hour access to your money with this account.

The ANZ Online Saver has a maximum variable rate of 2.30 per cent for three months, before it reverts to 0.50 per cent. There’s no minimum balance or fees with this product.

If you choose the NAB Reward Saver you’ll have a maximum variable rate of 2.30 per cent as long as you make no withdrawals and also make at least one deposit each month.

The CommBank NetBank Saver has an MVR of 2.51 per cent for the first three months before it reverts to 0.50 per cent. There are no fees with this account unless you request paper statements.

Compare savings accounts from Australia’s major banks, credit unions and building societies here.

The bonus rate terms

The way you get your bonus interest rate is an important factor in your account choice because if you feel you can’t meet them, you’ll be stuck on the base rate for the month.

Westpac wants you to make no withdrawals and make a deposit of at least $50 each month, whereas CommBank wants $200 a month but you can make one withdrawal without penalty. You’ll want to stay on your bonus rate because the base rates are very low. If you can’t grow your savings at a reasonable rate then you’d be better off thinking about term deposits instead.

How easy are these accounts to manage?

When you compare high interest savings account options, you also need to think about which bank gives you the most access, as well as the best mobile or internet banking facilities. If your bank has an app, make sure you can use it on your mobile devices and that it’s relatively stable.

Big Four Benefits

The Big Four are big enough to be able to offer you all the bells and whistles, like 24–hour customer service (for regular operations and emergencies) and lots of ATMs at home and abroad. You might also find your bank has partnerships with other financial institutions so you can easily link up your accounts.

Are there any downsides to banking with one or more of the Big Four?

It’s easy to just plump for one of the biggies when you’re looking for reliable financial products, including savings accounts, loans and transaction accounts because they’re leading. The brand names will be the first ones you think of when someone mentions Australian banks.

You know your money will be safe and that you’ll be getting great customer service, but you may find that you get all that and a better interest rate if you look to one of the lesser-known banks. By straying from the beaten path just a little, you could make your money work even harder for you.

Compare home loans from Australia’s major banks, credit unions and non-bank lenders here.

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.

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