Commonwealth Bank Review; Does it live up to the hype?

The Commonwealth Bank is one of the Big 4 banks in Australia. For the last century CommBank has been providing personal and business banking to Australian consumers via local branches, online and phone app services. A commitment to sustainability within its products ensures the Commonwealth Bank is well and truly in the 21^st century. Read on for the full Commonwealth Bank review.

Verdict: Some bad reviews and negative press from poor company actions and typically higher fees, but also lots of loyal customers and a variety of well-performing products. I will remain a CommBank customer for specific banking products.

CaptainFI is not a Financial Advisor and the information below is not financial advice. This website is reader-supported, which means we may be paid when you visit links to partner or featured sites, or by advertising on the site. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.

Introduction – Commonwealth Bank review

Opened in 1912, the Commonwealth Bank has been a part of the Australian landscape for the last 100 years. Known as one of Australia’s Big 4 banks, it has been a stalwart of Australian banking for many generations. Despite this, it has not been all smooth sailing, with claims of unethical behaviour at the 2018 banking royal commission. However, Commonwealth Bank is worthy of consideration when it comes to choosing a banking partner.

Read on to explore what you should take into account when considering the Commonwealth Bank.

Is Commonwealth Bank one of the ‘Big 4’ banks?

Yes. Commonwealth Bank, also known as Comm Bank, sits alongside Westpac, ANZ and NAB as one of the big banks in Australia. Being an exclusive member of the Big 4 club hinges, literally, on how ‘big’ the banks are. This includes market capitalization, total earnings and total customers.

These 4 institutions dominate banking in Australia, which is helped along by the Federal Government’s ‘Four Pillars Policy’. This policy stops these banks from merging with each other, but it doesn’t prevent them from merging with smaller banks.

Australia’s Big 4 banks are ranked among the top world banks for size, profitability and safety.

Is Commonwealth Bank a good bank?

Go online to check out some Commonwealth Bank reviews, and they don’t paint a very positive picture. Thousands of reviews put Commonwealth Bank at 1 out of 5 with 84% rating it as bad. Some commentators even criticize that it’s generous, as you can’t choose less than 1. Which is a sobering indictment. High fees, poor service, unable to access money, automated communication processes that leave you hanging. All the sort of problems that come with being a large faceless institution.

The truth is, Commonwealth Bank’s poor track record could be considered to be well earnt. In the 2018 Australian banking royal commission, Commonwealth Bank was identified as “the worst financial service entity for charging customers fees for financial advice they never received”. You can read about it in The Guardian Here. Let’s face it, one of the most profitable banks in the world had to make its huge profits somehow. However, Commonwealth Bank has been making efforts to clean up its act, with a webpage dedicated to outlining its action on royal commission recommendations – you can view it here: CBA action on Royal Commission recommendations (commbank.com.au).

But at the same time, it’s a big bank, with a large customer base. This makes me wonder whether the bad reviews are a vocal minority with an axe to grind, or truly representative of the customer group as a whole. Based on my vicarious experience through friends and family, Commonwealth Bank’s report card is mixed. Lots of branches, strong history and suitable products drew them in as customers. High fees, unethical behaviour and poor service drove them away.

The reality is, many Commonwealth Bank customers started as kids with their first Dollarmite account, a program that is now defunct. Once you’ve got your banking services locked in, inertia can take hold and it can be easier to put up with the poor services, rather than go through the hassle of moving your transaction, credit card and loan accounts to another bank.

So are they a “good bank”? I’d say after the banking royal commission they’ve got a lot of mea culpas to say in order to make up ground for people who’ve been burned with junk insurance and no-advice for a fee. If you want to be open minded, give them a try. Although, I tend to think there are better small banks when it comes to service, and better online banks when it comes to competitive rates and products.

You can of course venture onto some other comparison sites such as Finder and Choice for their comprehensive breakdown and comparison of Commonwealth Bank accounts and products alongside other competitors.

Who owns Commonwealth Bank?

Commonwealth Bank was started by the Australian Government, then was privatized in 1996. This means it is a locally owned public company. Many people would own a piece of Commonwealth Bank through shares as part of their superannuation. As mentioned earlier, Commonwealth Bank is a big, profitable business, so as an investment, it makes sense.

Is Commonwealth Bank a safe bank?

Whether Commonwealth Bank is a safe bank is an interesting question. When it comes to cyber security, financial institutions can be prime targets for hackers – lots of customers and lots of money. Commonwealth Bank uses a suite of data security measures to protect customers’ information and accounts, including secure systems, buildings, and trusted third parties.

When it comes to data security, Commonwealth Bank’s track record has left room for improvement. Previous data breaches in 2016 compromised 20 million bank customers when 2 magnetic tapes sent for disposal were unaccounted for. Since then Commonwealth Bank has worked to improve its management of customer data, and offers data security advice and tips to businesses on its website.

Further to this, Commonwealth bank offers free download and install of their Comm Bank app for tablets or PC, Windows or Mac, going some way to ensure it’s protecting customers irrespective of the device they use.

It’s also worth remembering, that the Australian Government offers a guarantee on deposits up to $250 000 per person, as protection for customers of financial institutions, such as the Commonwealth Bank. This gives customers peace of mind if something untoward happened, that caused the bank to crash.

What kind of accounts does Commonwealth Bank have?

Commonwealth Bank has a large range of accounts and banking services for personal and business customers. Their main products and services for personal use include:

Bank Accounts

• Transaction Accounts

– Smart Access Everyday Account – includes a Debit Mastercard, no monthly account fees for under 30s, or if you deposit $2000 each month (normally $4 pm)

– Streamline Basic Account – no monthly account fees for concession or health care cardholders

– Pensioner Security Account – earn interest and pay no monthly fees for retirees and over 55s

• Savings

– NetBank – link to the transaction account, earning interest on deposits

-Goal Saver – earn bonus interest as you save

-YouthSaver – account for under 18s

-Term Deposits – very competitive interest rate when you lock away your money for a set term

When you compare the Commonwealth Bank Savings accounts features, make sure you fulfill the requirements for bonus interest by reading the fine print.

Credit Cards

No or low annual fee credit cards are on offer. There is also a cash back option and 55 day interest free period on purchases. Interest rates range from 13.99% to 20.99%.

Personal Loans

$4000-$50, 000 available over 1-7 years, with fixed rate, secured and unsecured loans on offer.

Homes Loans

Commonwealth Bank offers a range of home loans however, like many other Commonwealth Bank products, there are more competitive options on the market.

Other Products

–         Superannuation, including Self Managed Super Funds

–         Share investment through Commonwealth Bank’s CommSec app

–         Insurance cover for assets like home and car

–         Overseas banking options

Commonwealth Bank offers a product called Commonwealth Private which offers a private banking service to “high net worth” and “ultra high net worth” customers – I’m curious to know the difference, although I’m pretty sure I’m neither. The private banking service offers advice, lending and investment opportunities.

So plenty of products on offer, but none seem that competitive when compared with what else is on the market. It’s also easy to see how they make their money, offering a paltry 3.45% on a term deposit, while charging up to 20.99% on a credit card. Commonwealth Bank kind of reminds me of Telstra – nation-wide coverage, at a premium. There are definitely better deals out there.

Does Commonwealth Bank have an App for internet banking?

Commonwealth Bank has an app for internet banking, which goes by CommBank. It’s easy to download via Apple or Google Play Store. Once you’re signed up, you can access the app with a PIN. You can then access your accounts, pay someone, check your balance, view expenses, and even direct you to the nearest CommBank ATM.

Independent research has ranked the app highly for customer engagement. In 2021, CommBank was awarded by Canstar for Bank of the Year for Mobile Banking and Bank of the Year for Online Banking. It’s a testament to the app’s user-friendly design, which makes managing your money easy. As well as keeping track of your accounts, there is good functionality when it comes to things like paying bills and transferring funds.

Does CaptainFI have a bank account with Commonwealth Bank?

Yes, I do my business banking with Commonwealth Bank. I have found them to always be pretty quick and flexible, including with what could be seen as a pretty unusual industry – making money online. I am frequently making unusual transactions, paying overseas contractors and companies, and have accounts with access for my sub contractors to cover costs associated in the conduct of their duties.

Commbank have offered me financing multiple times for the websites, including lines of credit and overdrafts, but I have preferred not to use any credit products and just use it as a basic transactional business account.

I have also been a Commsec customer for my own personal banking, when I was using CommSec to buy and sell shares.

Margin Loans

CommSec is the online share broking branch of Commonwealth bank, and through CommSec, customers can access Margin Loans for investing in shares. As any Barefooters would tell you, borrowing to invest in shares is risky business, and not for the faint-hearted. While NAB has the NAB Equity Builder loan, which enables you to invest in shares with a principal and interest loan in order to do debt recycling, the closest offering from the Commonwealth Bank is CommSec’s Margin Loan.

Margin Loans can be expensive with high-interest rates, and any dip in the share market can trigger a margin call where the bank will need you to pay in more cash to make up for the dip. Or they can sell some of your shares to make up the difference, at the worst possible time.

 Advantages of using Commonwealth Bank

• Plenty of shop-front branches, plus the website and app
• Easy access to staff for those who like dealing directly with customer service personnel
• User-friendly apps
• Access to interpreters for those who need it
• Comprehensive range of products and services, to keep everything in-house
• Commitment to sustainability
• Efforts to address banking royal commission recommendations
• Budget tools and calculators

Disadvantages of using Commonwealth Bank

• Poor customer reviews of banking experience
• Not the most competitive interest rates for savings accounts, term deposits and home loans
• High interest on credit cards
• Identified in the banking royal commission for junk insurance and fee for no-service
• Room for improvement for customers service
• Potentially complex loan applications (according to various reviews)

FAQ’s (Frequently Asked Questions) about Commonwealth Bank

Answers to some of the most Frequently Asked Questions about Commbank

Is Commonwealth bank good for home loans?

Commonwealth Bank has a suite of home loan products on offer to suit most customers. They have the First home Guarantee which helps first home buyers get into a home with as low as 5 percent deposit. Usually, buyers need a 20% deposit to avoid Lenders Mortgage Insurance (LMI). With this scheme, the Australian Government provides the other 15 percent, getting eligible buyers into their first home sooner.

Commonwealth banks also helps single parents who are eligible to buy a home with as little as a 2 percent deposit. This scheme is backed by the Australian Government’s Family Home Guarantee. The Federal Government’s New Home Guarantee is also available through CommBank.

Also on offer is the Extra Home Loan rate of 6.59 percent, Fixed Rate at 6.59 percent and Standard Variable Rate at 6.49 percent, as of June 2024. Split loans and offset accounts are also available.

Is Commonwealth bank ethical?

Standards & Poor’s Environmental, Social and Governance score (S&P ESG score) gives an overall rating of 65/100, which is not bad, but leaves room for improvement. Areas where Commonwealth Bank is scoring well is in Carbon Disclosure Project Climate Change score of B. They get this grade as when it comes to greenhouse gas emission reduction, they are doing well in areas such as disclosure, management, leadership and awareness. They are also committed to renewable energy. Commonwealth Banks also show commitment to gender equality.

Unfortunately, they are reportedly falling short in areas such as financing fossil fuels in general, including dirty fossil fuels. They’ve also been identified as selling junk insurance, and fined for corporate law breaches. They were the winners (losers?) of Shonky Awards in 2010 and 2014.

It seems they are making an effort to learn from past mistakes, and are moving ahead with a commitment to improve in areas such as the environment, social aspect and governance. So again, the S&P EGS Score of 65/100 leaves room for improvement, but is not too bad overall.

Can I open a Commonwealth account online?

You can open a Commonwealth Bank account online. The bank’s website and apps are user-friendly and allow easy access to accounts and other products.

Is Commonwealth bank the biggest bank in Australia?

Yes, Commonwealth Bank is the biggest bank in Australia. With a high level of brand recognition, it also has some of the best-known financial services in Australia, as identified by the Corporate Finance Institute.

Conclusion – Commonwealth Bank Review

The Commonwealth Bank is the biggest bank in Australia, serving the community for 100 years. They offer a range of products and services that are easily accessible via local branches, website and apps. Commonwealth bank is a one-stop shop for banking and finance products and services, with transaction and savings accounts, credit cards, home loans and also margin loans through their CommSec branch.

Called out in the 2018 banking royal commission for fee for no-advice and junk insurance, Commonwealth Bank has taken the feedback on board and are committed to actioning the commission’s recommendations. There have also been lessons to learn regarding security with a previous customer data breach in 2016. Ethically, the bank is not exactly ‘green’, but has shown a commitment to sustainability in its offerings. Online reviews show there is room for improvement when it comes to customer service.

It’s safe to say, that Commonwealth Bank has its pros and cons, its supporters and detractors. However, for a bank to be as large, with as many customers, and as enduring as it is, it must be doing some things right, and is probably not the worst bank.

Further reading – other Bank reviews

Check out my list of bank reviews here to see how the competition stacks up, and to find the right bank for your journey to Financial Independence

• Commonwealth bank
• NAB Bank
• ANZ Bank review
• Westpac Bank review
• ME Bank review
• ING Bank review
• UBank review
• HSBC Bank review
• Up Bank review
• 86400 Bank review
• Finspo review
• Spriggy review

Financial Disclaimer

Financial Disclaimer: CaptainFI is NOT a financial advisor and does not hold an AFSL. This is not financial Advice!

I am not a financial adviser and I do not hold an Australian Financial Services Licence (AFSL). In this article, I am giving you factual, balanced information without judgment or bias, to the best of my ability. I am not giving you any general or personal financial advice about what you should do with your investments. Just because I do something with my money (or use a particular service or platform) doesn’t mean it is automatically appropriate for your personal circumstances. I do not recommend nor endorse any financial or investment product, and my usage or opinion of any product should not be interpreted as an endorsement, advertisement, or intent to influence.

I can only provide factual information based on my journey to Financial Independence, and that is provided for general informational and entertainment purposes only. I make no guarantee about the performance of any product, and although I strive to keep the information accurate and updated as it changes, I make no guarantee about the correctness of reviews or information posted.

Remember – you always need to do your own independent research and due diligence before making any transaction. This includes reading and analysing Product Disclosure Statements, Terms and Conditions, Service Arrangement and Fee Structures. It is always smart to compare products and discuss them, but ultimately you need to take responsibility for your use of any particular product and make sure it suits your personal circumstances. If you need help and would like to obtain personal financial advice about which investment options or platforms may be right for you, please talk to a licensed financial adviser or AFSL holder – you can take the first steps to find a financial advisor by reading this interview, or by visiting the ASIC financial adviser register and searching in your area. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.