My experience opening an Australian bank account as a Singaporean resident

With the AUD/SGD dropping to a multi-year low on the back of a commodities meltdown, what better way to take advantage of this then to go for a 16 days holiday in Australia. Besides, Australia is an amazingly baby-friendly nation ( much more than Singapore) in terms of places to bring the Baby to. Milk and baby food is also darn cheap, being about 40% cheaper than Singapore. And so i thought i would be "saving" some money. BUT, my wife just had to change darn lot of money just in case we ran out , especially when the currency is cheap now. Naturally, there was excess and bringing back to Singapore to change back to SGD or just to keep it in a milo tin was a "SIN" to me. Money should always work hard, not rest and slack!Money as the spread going to the money changer should always be minimized too!

So the last week of the holiday, i opened an Australian bank account. Here are some lessons learnt.

1) As a Singapore Citizen who is just a tourist like me, DO NOT ever give an australian address to the banker to open an account for you. This is a major misconception! You do not need an australian address at all. If you give an australian address, you will automatically be deemed to be staying in Australia and your withholding tax rate will be  46.5% ( top marginal tax rate 45% + Medicare levy 1.5%)  on your savings account interest earned per year.  If you give a Singapore address, you will be deemed as a non-resident and withholding tax is only 10%. I reiterated many times to the banker that i was a non-resident just so he opened the account correctly. 

2) Go to the major banks like National Australia Bank (NAB), Commonwealth Bank of Australia(CBA), Westpac and ANZ. I was just passing by a community bank called Bendigo bank and thank GOD i didn't open with them as the banker asked me for an australian address and didn't even know the withholding tax rate. My suggestion is to go to an asian banker in one of the major banks as he or she has dealt with many asians opening bank accounts in Australia and so will be very experienced. 

3) Open the account at least 5 working days prior to your departure from Australia. The reason was because the atm card needs around 5 working days before they can be collected from the same branch you opened with. 

4) You have to have some activity in the account or else the account will be in dormant status and it will be swept to a government account. According to the asian banker i spoke to, he said it was HELL to get back that money with lots of paper work and time ( think months). He wasn't too sure about the span of time before dormancy starts but told me to open 2 accounts and transfer some funds between them once every 6 months just to be safe. As i can't have a peace of mind not knowing something for certain, here it goes:

Apparently it's 3 years ( i don't know if the 7 years one has be approved) and the Australian government takes about half a billion a year from these dormant accounts! That's free money!

So what's benefits

I opened the NAB reward saver account which currently has an interest of 2.85% pa, ( use to be 3.05% as can be seen in the pic below), After WHT of 10%, the net interest rate will be 2.565% pa (use to be 2.745%), which is better than any banks savings here and even better than our Central Provident Fund -Ordinary account of 2.5%. And this along with the belief that the AUD will appreciate in time to come.Going back to Australia is also certain and this will act as a holiday fund there.