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What are the different types of bank accounts?

There are three main types of bank accounts that you’ll want to be aware of when you start banking. These include:

  • everyday accounts
  • savings accounts
  • credit accounts.

Keep in mind that banks will have different names for similar types of accounts. At first it might be confusing, but if you know what to look for you’ll be able to find the right accounts for you.

Everyday accounts

Everyday accounts are day-to-day spending accounts, usually linked to a debit card. Each bank has a different name for their version, but here’s what you can expect from an everyday account:

  • A fee-free debit card.
  • Easy access to your account via a bank app, internet banking and phone banking.
  • No monthly account or transaction fees.

You can also set up everyday accounts without access to a debit card to use as bill-paying accounts.

Savings accounts

Savings accounts are great if you're looking to, well, save some money, though it helps to have some goals in mind first. Read on to help you work out what savings account to go for, as there are a few.

  • Basic savings account

In the beginning, choose a basic savings account to get you started. They won't earn you much interest, though they won't have any fees unless you make a withdrawal with a staff member inside a bank.

  • More advanced savings account

Once you build up a bit of money in your savings, and aren’t dipping into your account very often, it’s time to upgrade your savings account! This means you can take advantage of other savings account options that will make you more money in interest and increase your long-term savings balance.

Transfer the bulk of your savings to an account that rewards you with extra interest for a) not withdrawing any funds, or b) for depositing more than a certain amount, and the interest you earn will be heaps more than through a basic account.

If your bank offers the ability to ‘hide’ your savings account, think about using this feature. Many people find this helps them to save more and save better. As the old adage goes, “Out of sight, out of mind”.

And credit accounts?

Credit is access to money you can borrow from a bank when you do not have your own. The bank then bills you and you must regularly pay back a portion of the amount you borrow plus interest. The total you pay back will be more than you borrowed. A credit card is one type of credit product and an overdraft on your everyday account is another.

Almost every bank will offer types of credit in some form or another, and although as a general rule it’s best to avoid these, they can help you build credit (if you can manage them without losing control), cover short term gaps in funding or be used to gain rewards or points for spending.

For a helpful guide to what a credit card is and how to use one, check out the below Sorted link.

Useful links:


An overdraft is a form of credit usually attached to an everyday account that allows you to spend more money than you have in your account, up to a pre-set limit.

It’s true that an overdraft keeps your debit card from being declined, but often is so easy to use that your account keeps going into the red, or into debt. And overdraft debt can be confusing. Banks, for instance, vary hugely in their overdraft interest rates and because you don’t receive a monthly bill, you might be alarmed at how much interest you are paying.

Play it safe and manage any debt closely.

What is the difference between an EFTPOS, debit and credit card?

EFTPOS and debit cards are very similar. Without getting into the nitty-gritty (which, if it interests you, you can do by visiting this page), EFTPOS accesses your everyday account for payment and so does your debit card. EFTPOS though, is an Australasian system, so you won’t find it further afield. Debit cards use the international credit card system and so are accepted wherever your provider (whether it be Visa, Mastercard or another) is accepted. You can also use debit cards online, and they offer better protection against fraud.

A credit card is also usually backed by an international provider, like Visa and Mastercard, but accesses your credit account to make payments. When you use a credit card you are borrowing money that will need to be paid back.

Building credit

What is building credit and why should you care? Good credit allows you to be easily approved for future lending. So, whether you will want a loan for a new phone, car, sofa, or eventually a home loan, having good credit is important. Credit scoring in Aotearoa New Zealand is usually done on a scale of 1-1000, with scores below 300 considered ‘bad scores’ and scores above 500 considered ‘good scores’. Most scores are between 300 and 850.

If you have opened a credit card or utility account (gas, electric, internet or phone) you will likely have a credit score. If you have always paid your bill on time, it’s likely you’ll have great credit. If you’ve missed a deadline or two, you might see evidence of that on your report. Bear in mind, it’s never too late to turn bad credit into great credit - in fact, now’s better than ever.

For more information about credit score and to find out about yours, visit the following links.

Useful links:

Banks – there to help

Banks want to see you grow your wealth and keep your debt in check. If you ever have any questions, want to arrange your accounts in a way that works for you, or are having problems getting on top of your money, call your bank. They will be able to help you work out how to keep your banking simple.

Key websites

  • Sorted - Sorted is a personal finance site that has the tools and information you need to tackle debt, plan and budget, save and invest, dial up your KiwiSaver, plan for retirement, protect what's important, and take on a mortgage. Sorted lets you fine-tune your finances and get ahead moneywise.