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actyourwageToday I had a salutory lesson. I was just viewing articles in my local paper online and it had a link: "Compare savings accounts!" kind of thing.
I tend to transfer money that I'm not intending to spend in the next week out of my bank account into a linked internet savings account. It works for me--stops me spending money I need to spend on bills, puts any excess money in a place where I can't get to it easily for impulse spending. I can access it by two business days at the outside and it provides me with a bit of a buffer. So I'm all set, right?
Banks rely to a large extent on both customer loyalty and inertia to keep your business with them. The thing is, switching isn't that hard or stressful. Let me be perfectly clear: banks make money off you. Every account you have with money in it, they're making interest over and on top of any interest they pay to you. They have a perfect right to make money--and you as a customer have a perfect right to assess their services and take your business elsewhere if you can get a better deal. Don't let them rattle you. I can provide a number of helpful links for Aussies, at least, who wish to switch bank accounts (just ask in the comments).
What the hell. I was bored. I clicked on the link to evaluate savings accounts.
I was surprised to see that the product I had my money with WASN'T among the top-rated for interest rates. The link also rated the fees. There were other accounts that charged no fees, which is a major drawcard for me.
So, I went to the site of the bank (uBank) in question and read their product disclosure statement (PROTIP: always read these. And print them out and save them. You can quite often discover some nasty little surprises in the fees). It didn't have any of the things that set off warning bells in my head: there were no "If you transfer money out, you lose any interest for the month". There were no fees.
The interest rate was 0.12% higher even than the promotional rate that ING offers. And I can get an additional .10% interest by setting up a regular savings plan. Their regular rate is 1.42% above my current savings account. This doesn't seem like much, but for 20 minutes of my time and the ID I carry in my wallet, given that I usually have a balance of a couple of hundred in there, that's an extra 20 cents (approximately) a month.
In addition to this, they have some nifty goal-setting features that allow you to set a target that you're saving for and calculates the minimum monthly payment with the current interest rate to reach the goal. It's not perfect, but I am in favour of visual representations of goals. The only reason I've kept up such high payments on my credit card is because I have a progress tracker which lets me see how much debt I've cleared. Especially if your goal is a medium to longterm one, then keeping up motivation for sustained effort is difficult.
It doesn't sound like much, but every little helps. I guess the take-home message is--pay attention.
Strategies I have to help me do this:
Starting from now, I have a day every month when I go through and check that the financial products I have best suit my needs. I've set an alarm on my calendar. These needs are:
Everyday account
-No account-keeping fees.
-No fees for withdrawing money via ATMs
-Unlimited ATM and EftPOS transactions
Savings account
-No account keeping fees
-Highest interest rate available
-No minimum balance
-No penalties for withdrawing or not depositing money
First Home Saver Account
This is a fantastic product that the Australian government has made available for Aussie first home buyers. It has an interest rate of 17% on the first $5000 a year, interest is only taxed at 15% rather than 30% and there are no fees. The bank that provides it may also pay you additional interest
-Highest bank interest rate
What features do you need? Do you have a strategy that helps you keep track of what product is the best for you?
I tend to transfer money that I'm not intending to spend in the next week out of my bank account into a linked internet savings account. It works for me--stops me spending money I need to spend on bills, puts any excess money in a place where I can't get to it easily for impulse spending. I can access it by two business days at the outside and it provides me with a bit of a buffer. So I'm all set, right?
Banks rely to a large extent on both customer loyalty and inertia to keep your business with them. The thing is, switching isn't that hard or stressful. Let me be perfectly clear: banks make money off you. Every account you have with money in it, they're making interest over and on top of any interest they pay to you. They have a perfect right to make money--and you as a customer have a perfect right to assess their services and take your business elsewhere if you can get a better deal. Don't let them rattle you. I can provide a number of helpful links for Aussies, at least, who wish to switch bank accounts (just ask in the comments).
What the hell. I was bored. I clicked on the link to evaluate savings accounts.
I was surprised to see that the product I had my money with WASN'T among the top-rated for interest rates. The link also rated the fees. There were other accounts that charged no fees, which is a major drawcard for me.
So, I went to the site of the bank (uBank) in question and read their product disclosure statement (PROTIP: always read these. And print them out and save them. You can quite often discover some nasty little surprises in the fees). It didn't have any of the things that set off warning bells in my head: there were no "If you transfer money out, you lose any interest for the month". There were no fees.
The interest rate was 0.12% higher even than the promotional rate that ING offers. And I can get an additional .10% interest by setting up a regular savings plan. Their regular rate is 1.42% above my current savings account. This doesn't seem like much, but for 20 minutes of my time and the ID I carry in my wallet, given that I usually have a balance of a couple of hundred in there, that's an extra 20 cents (approximately) a month.
In addition to this, they have some nifty goal-setting features that allow you to set a target that you're saving for and calculates the minimum monthly payment with the current interest rate to reach the goal. It's not perfect, but I am in favour of visual representations of goals. The only reason I've kept up such high payments on my credit card is because I have a progress tracker which lets me see how much debt I've cleared. Especially if your goal is a medium to longterm one, then keeping up motivation for sustained effort is difficult.
It doesn't sound like much, but every little helps. I guess the take-home message is--pay attention.
Strategies I have to help me do this:
Starting from now, I have a day every month when I go through and check that the financial products I have best suit my needs. I've set an alarm on my calendar. These needs are:
Everyday account
-No account-keeping fees.
-No fees for withdrawing money via ATMs
-Unlimited ATM and EftPOS transactions
Savings account
-No account keeping fees
-Highest interest rate available
-No minimum balance
-No penalties for withdrawing or not depositing money
First Home Saver Account
This is a fantastic product that the Australian government has made available for Aussie first home buyers. It has an interest rate of 17% on the first $5000 a year, interest is only taxed at 15% rather than 30% and there are no fees. The bank that provides it may also pay you additional interest
-Highest bank interest rate
What features do you need? Do you have a strategy that helps you keep track of what product is the best for you?
