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Different types of bank accounts

There are two main types of bank accounts in Australia. One is for saving money, and the other is for daily transactions.

Both accounts have specific purposes and features, and allow you to keep your money in a safe place. Understanding what you'll use your account for can help you choose the right one.

What is a transaction account?

A transaction account is the most common type of bank account in Australia. It's used for daily expenses, salary deposits and paying bills. A transaction account usually comes with a debit card for shopping in-store, online and overseas.

What is a checking account?

A checking account (or chequing) is another name for a transaction account in the US and Canada. In the UK, transaction accounts are called current accounts. 

What is a savings account?

A savings account allows you to set money aside to make it grow faster for longer-term goals. This account might not come with a debit card because it's primarily for saving money. Unlike other investments, it’s usually pretty easy to access your money in a savings account when you need it. 

The main differences between a transaction account and a savings account come down to the purpose they serve and the amount of interest you can earn.

What is a term deposit account?

A term deposit offers you a fixed interest rate to lock your money away for a set amount of time (called a 'term'). There's usually a minimum term of investment – from 1 month to 5 years – and a minimum opening deposit. 

You'll need to give 31 days' notice to take your money out of a term deposit. If you withdraw your money before the end of your term, you may be charged an early withdrawal fee and the interest earned will also be reduced.

Transaction (checking) vs savings account

A savings account will earn you higher interest than what you'd get on a transaction account. This is designed to encourage you to grow your money. 

There may be restrictions on your savings account when it comes to making withdrawals, or the deposit required to earn bonus interest. 

Another difference is that transaction accounts usually come with a debit card to access funds, and savings accounts do not.

Find out more: Tips for banking in Australia

About our accounts

With an HSBC Everyday Global transaction account, you'll get benefits such as:

  • No account, transaction, or local and overseas ATM fees[@other-fees-charges-apply]
  • Cashback on eligible purchases[@accounts-2percent-cashback]
  • Digital Visa debit card
  • Up to $250,000 in deposits protected by the Financial Claims Scheme (FCS)

Other banking services fees and charges may apply, including corresponding bank fees for international transfers. 

To deposit and withdraw money, this online savings account must be linked to a transaction account. With the Everyday Savings Account, you'll get: 

  • 3-month introductory variable rate
  • Ongoing variable interest rate
  • No monthly account fees
  • No opening or minimum balance requirement

Our online savings account includes:

  • Standard variable interest rate, plus bonus interest[@Accounts-300-higher-bonus-interest]
  • No monthly account fees
  • No minimum balance requirement
  • Saving in up to 10 foreign currencies

Monthly bonus and variable rates are subject to change.

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Important information

This article is intended to provide general information of an educational nature only. This information should not be relied upon as financial product advice as it does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of the information to your own circumstances and seek independent legal and financial advice prior to making any investment choice.