Commonwealth Bank has paused a $3 in-person cash withdrawal fee for some customers after backlash from Australians who vowed to close their accounts in protest.

Australia’s largest bank was blasted as ‘out of touch’ and ‘greedy’ over the decision to shift all customers with a legacy ‘Complete Access’ account to a ‘Smart Access’ account, which includes an ‘assisted withdrawal fee’. 

The fee was to apply from January 6 for customers when they withdraw cash from tellers in bank branches, post offices or over the phone. Free withdrawals will stay for ATMs and fee waivers apply to pensioners, those under 18 and those who deposit $2,000 a month. 

What you need to know about the Commonwealth Bank backflip: 

• Commonwealth Bank will pause migration of some customers on a ‘Complete Access’ account to a ‘Smart Access’ account, which includes a $3 ‘assisted withdrawal fee’.
• The bank will individually consult these customers to move them to a new type of account that best suits their needs – such as one without a withdrawal fee.
• Existing ‘Smart Access’ account holders will still be charged a $3 assisted withdrawal fee.

CommBank’s group executive of retail banking services Angus Sullivan said on Wednesday afternoon the migration to the new account would be paused for six months for customers who are ‘worse off with the new fee’.

He said the bank would then individually consult with those customers, which are about 10 per cent of its customer base, and move them to a new type of account that best suits their needs.

It is understood the assisted cash withdrawal fee will still remain for customers who are already on the Smart Access account.

‘We acknowledge we haven’t got the communication right about this,’ Mr Sullivan said in a phone meeting with reporters about 12.15pm. 

He said the switch would continue for customers who are better off on the new account, but admitted the bank had made the change ‘more difficult than we should have’.

CommBank group executive of retail banking services Angus Sullivan (pictured) said a $3 fee to withdraw money in person would be paused for some customers following intense backlash

Customers on Complete Access accounts were told they would be migrated to Smart Access accounts which come with the new fee from January 6

Anthony Albanese‘s government earlier called on the bank to drop the fee.

‘It doesn’t seem fair or appropriate and this is a huge bank making huge profits. Come on, guys. It’s Christmas. We don’t need this right now,’ housing minister Clare O’Neil said on Seven’s Sunrise.

‘This is not something the bank should be doing and we’re asking them to reconsider.’

Commonwealth Banks made a $9.5 billion profit after tax in the 2023/24 financial year.

However it did complain the cost of keeping physical cash in its network was costing it about $350million a year which was a ‘challenging commercial model’.

The government recently said it was considering ordering businesses like supermarkets, pharmacies and petrol stations that sell essential items to accept physical cash payments.

About 94 per cent of businesses accept cash, but this is down from 99 per cent before the Covid pandemic.