Some Australians stay with the same bank all their life and don’t know there’s a better deal down the road. They may have transaction and savings bank accounts, a home loan, personal loans and a credit card – all with the same institution.
Well, that’s all well and good if that bank is looking after you, but it’s good to be across the market and know what else is out there – “setting and forgetting” can be a costly policy.
It sometimes helps parents if they have a teenage child looking at opening their first bank account –they will start looking around and gathering information, reassessing their own accounts too.
Here’s what you can expect.
Types of Bank Accounts
Everyday Transaction Accounts
These are the most common accounts that allow you to access your money freely on a daily basis, allowing you to withdraw cash from ATMs, pay bills and so on. Though they are sometimes called “savings” accounts the rates of interest offered are very low and they are really designed for you to access money and spend regularly, rather than save. It’s best not to keep any more money than is necessary for your day to day requirements in these accounts.
Find an account that suits your banking habits, ensuring you don’t get charged too many fees. Online accounts generally have the lowest fee structure.
These accounts offer a higher rate of interest than the transaction accounts. In return your money may be less accessible and may be “locked up” for a set period of time.
Nowadays an online savings account is a common choice because fees are low and money can be easily moved around – transferred from transaction accounts to savings accounts, for example.
Some of these accounts will reward you with a higher rate of interest if you make regular payments– for example, having your salary paid into them.
They are useful when saving for a particular goal (like a deposit for a home loan) or when just trying to make your money grow a little faster. The compound interest means you earn interest not only on the money you pay in, but interest on the interest you earn too.
Comparing Fees on Bank Accounts
Keeping fees to a minimum should be the priority when it comes to your banking. You should compare each of the following:
- Monthly account keeping fees
- Internet banking fees
- ATM fees – your bank and other banks’ ATMS
- EFTPOS fees
- Phone banking fees
- In-branch transaction fees
None, some, or all of the above fees may apply.
Switching Bank Accounts
Since the reforms enacted on July 1st 2012, it is easier to switch between Australian bank accounts than before.
The main concern for most account holders is what to do about existing direct credit and debit arrangements.
Nowadays you can ask your new bank to contact your old back and assist with switching all existing direct credits and debits over, as well as distributing your new account details to all payees.
If you’d prefer to look after the process yourself, simply ask your old bank for a list and present it to your new bank to facilitate the switch. Don’t forget annual payments such as insurance or gym subscriptions as well as monthly bill payments which will need to be transferred to your new bank account.
It’s “silly” season again when people over-spend on their credit cards and spend fortunes they don’t necessarily have on the perfect Christmas gift.
Of course Christmas shopping can be fun – but too often it’s followed by a bad hangover, brought on by the credit card statement that arrives through the door in the New Year.
So, before you buy, it’s worth doing a few calculations if you are using your credit card to make purchases this festive period. Continue Reading…
There’s only so much you can do online with home loans. Home loan comparison sites can help walk you through the process, make sure you are informed about your choices and lead you to some of the better deals out there. But at some point you will have to deal with a flesh and blood person to take your interest further….meet the mortgage broker!
With the good comparison sites, once you find a home loan deal that interests you they will put you in touch with a broker, who will guide you through the process from there.
Getting a broker that’s looking after your interests is ultra-important because a home loan is the biggest financial decision most of us will make in our lives. Mistakes can be costly, so how do you know you’ve got a broker fighting your corner? Continue Reading…
Christmas and New Year is always a time when Aussies load their credit cards to the hilt with spending on gifts, holidays and treats.
Over the years, many Australians have become savvier with their credit card usage, paying off larger amounts monthly and thereby reducing their debt; many pay off their whole balance each month without any interest payment.
But the credit card is still a debt trap for some Aussies – and this time of year highlights it. Here are a few common pitfalls that can turn an innocent credit card into your worst financial nightmare. Continue Reading…
One feature that many of the gold and platinum Aussie credit cards have is free insurance. Most card issuers use this as a perk to draw potential big spenders to their cards and, if you are a regular traveler or shopper, it’s worth knowing what you’re covered for by your credit card.
Here’s a rundown of the main types of insurance that may be attached to your credit card deal:
Extended Warranty Insurance
An extended warranty is a prolonged warranty that covers purchases you make on your credit card. People making a large purchase that comes with a warranty sometimes want some extra insurance against failure, breakdown or damage.
Many of the Gold and Platinum credit cards will offer a free one-year extended warranty on warranties of five years or less and may cover refurbished items. There will likely be a cap on the coverage amount per claim, per year or per lifetime and there will be exclusions to the coverage. Continue Reading…