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Tips for choosing a Savings Account in Australia

Money can be a tough thing to manage and even harder if you
don’t earn very much from your job. When it comes to
electricty bills, water bills, groceries and other expenses
if you don’t track what you spend them you’ll wonder where
it’s all going and when unexpected things come up that
needs to be paid for a savings account (especially a high
interest account) can bail you out. By putting in as much
as you can every week you will make life easier for
yourself in the long run.

Many people use the first bank account that they come
across without looking at the interest rate and fees and
this is a mistake because fees will eat away at your hard
earned savings and you may not be maximizing your income
with a low interest rate, so make sure you check your
current interest rate and look for a better deal, it’s best
to look every few months as banks are always changing their
rates some go up some go down.

As many people tend not to have a good savings habit
another way is to have your employer put part of your wage
directly into a savings account you can’t access so easily
(one without a key card perhaps) and the rest into your
normal account, this way it’s easy to make a habit of not
spending it and will benefit your greatly when you need the
money. It will become such a habit that you won’t even miss
the extra money because you will learn to live without it.

Any bank you go to should be able to advise you on what
will be the best account to maximise your money, they have
trained specialists who should be able to break it down
into details so that you can understand everthing easily,
if you can’t understand then perhaps try another bank
because that is their job to get you to understand what you
are doing rather than trying to sell you their services.

So your aim is to try to save on consistent weekly or
monthly basis, make it a habit and you will soon see that
it becomes easier over term and will benefit you greatly in
the long term.

If you want to find a high interest bank account in
Australia, then there are many comparison sites around.
Just try a search in google or yahoo.

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Andrew is a writer for many Australian websites covering
topics in the fields of Finance including
http://www.banksavingsaccounts.com.au , Insurance, Travel
and others.

A home line line of credit offers you an easy credit facility using the equity in your home as collateral. You can use your line of credit just like a regular credit card but without the higher rates of credit card interest. The interest you pay is at the same rate as your home mortgage.

You can also save interest on your home loan at the same time by paying extra cash into your account. If you need it, you can easily redraw the cash at any time, up to your credit limit. However while you aren’t using it, any extra payments are saving you interest on the daily balance of your home loan.

If your bank or finance company has the facility, you can even combine your line of credit with your home loan into what is called a home accelerator loan. With this type of loan package, your entire paycheck is deposited into your home loan. You can draw funds as you need them but while your idle cash is sitting in your account, it is saving you interest.

Discuss these options with your bank or broker and find out what will work best for you. It’s your money, make it work for you.

Mortgage accelerator loans are relatively new to the USA but have been common in other countries for several years. In Australia over one third of all home mortgages are actually mortgage accelerator programs. As long as you have a positive cash flow, you too can benefit from this new type of home mortgage.

Simply by changing the way you use your cash, you can save thousands of dollars in interest payments which results in you owning your home much earlier. Rather than having your pay check just sitting in a check or savings account, you can have every dollar of your earnings working to save you interest. Your money is still available to spend as you need it, but until you use it, it is saving you interest every single day.

Most savings or check accounts pay very little interest. By using your idle funds against your daily mortgage balance, you are actually putting these funds to work. Instead earning almost no interest, they are actually saving you you the 5-7% percent rate of your mortgae. Your money is now working for you and will help you to own your home sooner.

Take a look at the video for more information.

Fighting Unfair Bank Fees in Australia

The key to fighting excessive bank fees is to know the terms and conditions of the accounts you use. In recent years, most Australian banks have increased fees or introduced new fees. Be aware of the terms in the fine print. When you activate an account you are accepting the conditions imposed by the bank and this usually includes a disclaimer that the bank can change the conditions.

One of the newer ways that banks are robbing us, is with the use of “shadow limits”. Supposedly all credit cards have a credit limit determined by the bank and accepted by you. However, the banks may allow a transaction to go overlimit, up to a certain point. They won’t tell you what that “shadow” amount is. They will charge you an overlimit fee. As I see it in that situation, the bank has two choices. They could just decline the transaction, which in the case of credit cards, can result in no extra fee, or they allow the transaction, and charge you extra. It’s easy to see which option is better for the bank. If your account remains overlimit they will charge you the fee every month until you reduce the balance.

Shadow limits can also apply to ordinary savings or cheque accounts. When an account is low on funds and a transaction would result in overdrawing the account, the bank may reverse the transaction and apply a dishonour fee. Some banks will allow the transaction, again, up to some unknown limit, and apply a similar fee for over drawing the account. They may even charge you the same penalty several times in one day if multiple transactions are involved. The resulting fee can end up costing you more than the actual amount of the withdrawals. Ask your bank if your account has a “shadow limit” and if you don’t want it, ask them to remove it.

Over the last 5 years, credit card fees and penalties have been on the rise. The best way to fight this is to shop around for a low fee credit card. When transferring a balance to a new card, again check the fine print on the new card. Be sure there is no hidden surprises. If you don’t need or don’t use the extras provided by a high fee card, change the card.

If you are not happy with the fees your current bank is charging you, shop around. Make a list of the account features that are most important to you, and start looking for another bank or credit union that will provide just the features you need. Don’t be caught paying for services you won’t use. You can visit the banks/credit unions themselves to ask questions, but you can also do a lot of research online. It’s easy to do a search for information on specific account types and you will also find forums where others discuss their own banking experiences. It’s your money, take control of it.

Reader’s Comments: Which bank gouges you? | News.com.au

I’ve been reading (and had to contribute) the comments posted on this news story. It’s amazing how many people offer comments that have no basis in reality. Some are blaming the current government which has been in power for less than 2 months, some are blaming the previous government.

In reality, the world economy is in a bit of a mess at the moment and I personally don’t believe any Australian government has that much influence on international business.

Banks are a business and they will endeavour to make a profit. It’s a simple fact. If their costs increase, they will pass those costs on to consumers. It’s unfortunate for those who have large loans and although I do sympathise, I think those that borrowed need to accept the consequences of their own decision. They made the decision to take out a loan. They agreed to the terms of a variable loan. It’s too to late complain about now.

Well, that’s my opinion anyway, it’s the only only one I have.