An article by GenX published
at Melbourne Victoria Australia www.melbournevicaustralia.blogspot.com
Please do not reprint or republish in part or in any form.
Generally, we would think that term deposits (also known as fixed deposits) would pay a higher interest rate compared to savings accounts. However, this is not necessarily the case in Australia!!!
Most banks in Australia, if not all, offer online savings account that pays interest ranging from 2.25% to 2.75% (Standard Variable Rate as of January 2015). And in order to attract you to deposit your money with them, the banks will offer additional Bonus Interest Rates of more than 1% for the first 3 to 4 months only. After the promotion period (3 or 4 months), you will end up earning the lower standard variable rate for life!!!
ANZ Bank Online Saver
ANZ Online Saver offers 2.5% Standard Variable Rate plus 1.2% Bonus Interest Rate for the first 3 months. Therefore, the ANZ Online Saver account will earn you 3.7% interest rate for 3 months and then the interest rate for the Online Saver will revert to the Standard Variable Rate of 2.5% - which means you will be stuck at a lower interest rate for life!
Also please note - in order to sign up for the ANZ Bank Online Saver Account, you need an ANZ Everyday Banking Account. The ANZ Everyday Banking Account is NOT TRULY FREE, i.e. it imposes a monthly fee of AUD5 if you do not deposit at least AUD2000 monthly into it! So you may end up paying $60 a year for nothing if you do not deposit $2000 every month.
Commonwealth Bank Netbank Saver
Just like ANZ, Commonwealth Bank also offers a similar online savings account called NetBank which pays 2.5% Variable Interest Rate plus 1.2% Bonus Interest Rate for the first 3 months. So, just like ANZ, your funds will only earn you a miserable 2.5% interest rate starting from the fourth month and for the rest of your life.
And in order to sign up for the Commonwealth Bank NetBank Saver, you also need to sign up for a Commonwealth Bank Everyday Account which is NOT TRULY FREE; because just like in ANZ’s case, you need to deposit AUD2K monthly or else you will be penalized and charged a monthly fee.
Many people sign up for the account(s) above because ANZ Bank and Commonwealth Bank have branches and ATMs everywhere making it very convenient.
However, from both examples above, it can be concluded for long term savings, you should avoid this type of savings accounts and instead look for savings accounts that give you high interest rate starting from the very first day you sign up for the account and for the rest of your life. By doing so, it will not only earn you more money but save you time and the hassle of moving your funds from bank to bank to earn higher interest rates.
HOW TO AVOID BEING IMPOSED MONTHLY FEE ON YOUR EVERYDAY TRANSACTION ACCOUNT IF YOU ARE UNABLE TO DEPOSIT $2000 A MONTH
Now, for those of you who are unable to deposit $2000 a month into your Smart Access or Complete Access Commonwealth Bank Everyday Transaction account to avoid being penalized and imposed a fee, here is a tip for you.
Say you have the following amount in your Commonwealth Bank Accounts:
Smart or Complete Access - $33.18
NetBank - $618.00
Transfer $500 from Netbank to your Smart/Complete Access Account
You banking accounts will now show:
Smart or Complete Access - $533.18
NetBank - $118.00
Transfer $500 from your Smart/Complete Access Account back into Netbank Account.
Once the $500 is credited into your Netbank account, immediately repeat Steps 1 and 2 above another 3 times and you would have “deposited” $2000 into your Smart/Complete Access account; thus fulfilling the $2000 monthly deposit requirement into the Everyday Transaction Account to avoid being penalized and imposed the monthly fee.
Repeat the above tip/method every month and you’ll get to enjoy FREE EVERYDAY TRANSACTION account with Commonwealth Bank throughout the year :)
NAB – TRUE FREE BANKING
Before I proceed any further, I would like to touch on National Bank Australia (NAB) banking accounts.
NAB Classic Banking Account is an Everyday Transaction Account which is FREE FOR LIFE, i.e. no minimum deposit and no monthly account fee whatsoever, unlike ANZ Bank Everyday Account and Commonwealth Smart/Complete Access Account where you need to deposit $2000 a month to avoid being penalized.
Once you sign up for NAB Classic Banking Account and have registered for NAB Online Banking, you can then sign up for NAB iSaver Online Savings Account.
NAB iSaver pays 2.5% standard variable rate PLUS 1% Bonus Interest for 4 months. Therefore, the funds in your NAB iSaver will earn you 3.5%. Now, this amount is less than the 3.7% interest rate offered by ANZ Bank and Commonwealth Bank shown in my earlier example. So why the heck am I telling you about NAB iSaver? Read on and you may just learn another thing or two.