According to Canstar, account holders should review their account for any interest and taxes paid. This will give them an idea of how much they are earning. Although banks set up a minimum amount for accounts to earn interest, some accounts provide a decent interest rate for qualified accounts. For instance, the headline rate of an account can be 4.25 percent but account holders may discover that they earn minimal or no interest on the first $1,000 deposited and different rates for deposits from $5,000 to $20,000 or even $500,000.

Canstar also advised account holders to review the conditions of the interest payments, whether it is applied to the full balance or part of the balance only. Essentially, if an account holder has $6,500 in his account and the interest applies only on balances of more than $5,000 the account earns only the top rate on $1,500 of the deposit.

”Look for an account that pays interest on the entire balance,” said Chris Groth, a Research Manager at Canstar.

He also explained that depositors should be particular about fees because of its huge impact on their savings. ”If you are paying $5 per month in account-keeping fees, this is equivalent to 3 percent per annum on a $2000 balance,” he said. This means that account holders may find themselves in a situation where their account is getting minimal interest yet paying up big fees.

The product ratings of Canstar are categorised into three profiles: a low transactor wanting full service, a high-volume transactor who wanted full service, and an electronic transactor, wherein services refer to branch transactions.

Canstar revealed that daily transactions accounts with decent interest and no fees are rare to none; and amongst the fee-free or low-fee accounts contending for the coveted five-star rating paid negligible interest or none at all. However, there were exceptions like NAB’s Cash Manager which paid 3.75 percent on a $1,000 balance (both rated for high and low transactors), Newcastle Permanent’s Rapid Saver with an interest rate of 5.5 percent (rated for electronic transactors), and Bankwest’s Hero Transaction Account with an interest rate of 4.5 percent on a $1,000 balance.

Canstar recommends depositors to opt for non-transaction accounts such as bonus saver account, cash management account or an online savings account. Of the 392 deposit accounts that were reviewed, 33 percent of deposit accounts paid no interests on accounts with balance of less than $1,000 whilst for balance of $5,000, more than 50 percent of the deposit accounts only paid less than 2 percent interest. For hopeful savers, less than 25 percent of the accounts paid more than 4 percent interest on a balance of $1000 and for deposits of $5,000, less than 33 percent of the accounts paid more than 4 percent.

The Canstar review included bonus saver accounts, cash management accounts, junior savers accounts, everyday transaction and online savings accounts.

Analysis of ATM fees shows that $2.50 is becoming the new norm for a withdrawal fee, up from $2 which can drive ATM fee income to an estimated $600 million a year.

Reserve Bank (RBA) data shows that while the total number of ATM transactions fell to a six-year low in January, there was a surge in the use of machines not linked with a customer’s bank, otherwise known as foreign ATMs.

The main ATM operators outside of the major banks are Cashcard and Customers Limited. The two alone control 30 percent of ATMs around the country, and both increased their ATM withdrawal fees from $2 to $2.50 which is a troubling predicament after politicians assured consumers that moving to a “direct charge” regime would reduce the cost of accessing cash.

Analysts believe that customers will lose out from this quandary as the big banks are sure to follow suit and make $2.50 the norm in ATM fees which by then will be a clear sign that the RBA’s 2009 ATM reforms have failed.

It would be recalled that in April 2009, the RBA created several reforms to the ATM system to ensure that customers were charged not by their own financial institutions but rather than through ATM owners themselves.

One requirement of the reform was that ATMs display the cost before customers confirmed the transaction, which was supposed to enforce the reform’s objective of putting a downward pressure on the cost of ATM withdrawals. Analysts say this is not happening as ATM fees have been on the rise since 2009.

The major banks so far have no plans to raise their ATM fees in the near future, which is welcome news as Australians already pay more in bank fees compared to people in the UK and the US.

Fujitsu Consulting says Australians on average paid 22 percent more in bank fees than the British and 11 percent more than Americans, as the average Australian household paid close to $1000 in fees each year compared with $749 in the UK and $850 in the US.

But Christopher Zinn of consumer group believes the fees are only going to keep going up.

“While it’s fair enough for the banks or the financial networks to get a return on running the ATM and covering their costs, charging $2 or even more just to find out what your account is, is really out of order,” he said. “It’s another thing where we need regulation to make sure that the charges are in line with the costs.”

An alternative may be on its way to Australia as Customers Ltd, which owns over 6,000 ATM terminals all over the country, expressed interest in pursuing an American model that allows users to make cash free withdrawals if they watch an advert lasting up to 30 seconds.

The ATM business model was rolled out by Free ATMs NYC in the US last year, and millions of transactions took the option to watch short advertisements to save on withdrawal fees.

Although Rohan Martin, corporate affairs controller of Customers Ltd, cautions that in accounting for free or discounted withdrawals, ATM providers would need to structure their business models. He also worries about tweaking the practicalities of ATM banking, as additional delays to withdrawing money could increase time spent in queues.

“We’re mindful that the intrinsic function of the terminal remains – convenience,” he said. “It’s about people gaining cash in a safe and secure environment and doing that as quickly and efficiently as possible.”

Right now, customers slugged with fees are those who prefer to draw cash from foreign ATMs rather than walk a block to their own bank’s ATM.  Would these same customers opt to watch a 30 second infomercial just to save a dollar or two?

Although retirement planning is a serious matter to Aussies, this unfazed focused can be futile as experts believe that even 9 percent of each Aussie’s salary that goes straight to superannuation will not be enough to guarantee a quality and laid-back retirement. Even more disconcerting are asset values that go on dipping instead of increasing, thus saving now is clearly the way out. After all, having more money in the bank come retirement time is a much more comforting thought than having less than what is needed.

Saving for the future starts with discipline. If a consumer’s discipline naturally dwells within then there is nothing more to discuss, because a disciplined person will make the right and practical choices most of the time. Seldom does a disciplined person wander about confused not knowing what to do or which direction to head. The sacrifices that are referred to may not even be much of a sacrifice for a disciplined person. As for those who lack discipline, it is a totally different story. Budgeting, saving, avoiding the urge to spend – they all fall under discipline. Disciplined saving may not be easy at first, but it’s achievable.

Start making a list of all those tempting things to buy and categorize them into necessity and luxury. It will be no surprise to find out that it actually helps to take a step back, try to feel if the urge will still be there a day later, then decide on what is best. Is it something practical or just a waste of money?

Preparing for retirement is a very important task that has to be done now, and you can start by putting savings in the bank or open a self-managed super fund (SMSF).   Although, some financial advisors would argue that instead of keeping that additional 5 percent into the consumer’s retirement fund, it should just be invested in something else.

Always keep in mind though that nothing compares to money getting special treatment within the superannuation structure, otherwise, it will not be spared or exempted from the sole disadvantage of investing money out there – the taxes.

In managing super funds, stay neutral no matter what the market says. In other words, do not go for the big fishes because like any big thing that one may try to acquire, it may be hard to handle and control and eventually lost in a one-sided battle. Recently, markets have just been dipping and rising repeatedly that it makes it so hard to predict where or how it will end. So, putting into play the tried and tested “Dollar-Cost Averaging” should be a smart thing to do. Instead of waiting for the right moment to capture that one huge catch, make small and regular investments. Playing it safe, like in any scenario a consumer may encounter, is indeed safe.

Saving through super funds is no different from planning a long drive. If a driver is careful and steady, then chances are arriving at that destination will most likely be a safe and enjoyable experience as well.

Many can draw good savings insight from the former Miss Universe Australia contestant’s interview, from bargain shopping to opening a savings account.

Walford goes bargain shopping and finds best bargains at vintage shops to score old fur coats and denims. She doesn’t shy away from freebies either, taking delight from M.A.C. make-up as the best free item she got for free.

Her greatest money saving secret comes right out of the pages of money saving tip blogs, but it is something she lives by on a daily basis.

“I pack my lunch for work. I think buying lunch everyday really affects your bank account unnecessarily when you can bring what you have at home and save at least $100 a week. It all adds up,” noted Walford.

She’s open to take advice from friends and investors when it comes to money.

“A lot of my friends are bankers and property investors, so I’m always told to get together a deposit and buy an investment while I’m young,” she said.

She follows up on the advice as well, as she has saved a decent deposit and ready to invest should the right opportunity arise.

As for credit cards, she doesn’t have any and would rather use debit cards when purchasing items.

“I won’t ever own a credit card – that’s what a debit card is for, people! It will keep you out of trouble,” she explains.

She may be a thrift saver but she knows she isn’t perfect and she acknowledges her mistakes.

“I’d be a millionaire if I gave up … shopping. These days I’ve got to stay away from internet shopping. That damn technology is sending me broke!”

So how does she view herself? Is she saver or a spender?

“A bit of both. I’d have an anxiety attack if I didn’t have savings – I’ve been saving since I finished school. But I do a lot of travelling and a stupid amount of shopping too, so you have to try to balance it out.”

And there-in lie the secret to handling money.  It’s only human to spend money when needed and to reward ourselves from time to time.  The secret is to find a balance in a way that we save and invest money on a regular basis while spending money on ourselves as well.

It seems many Australians are finding that balance too, as the latest retail figures show spending growing at a trend rate of just 0.1 percent a month, which is much lower than the rate of inflation.

There’s a paradox among Aussies now wherein they think it’s a good time to buy but they think finances are bad as well.

The latest Westpac Melbourne Institute consumer sentiment survey finds 43 percent of Aussies believe family finances have worsened over the past year.  The same survey group also thinks “now is a good time to buy a major household item” (50 percent), “now is a good time to buy a car” (44 percent), and “it’s a good time to buy a house” (48 percent).

Westpac’s chief economist, Bill Evans, has an explanation for the paradox.

“When we ask whether now is a good time to buy, people say ‘yes’ because stuff is cheap on account of the high dollar. But that doesn’t mean they’ll do it.” Evans explains. “We have found actual purchases to be much more closely related to how they feel about their finances, and people are worried.”

Although a bearish approach to spending maybe due to people being cautious with their money, there is hope that when things get better, Aussies will continue to service their savings and investments and finding a balance with spending.

So much so that we could be pricing ourselves down on interests by banking too much with the big banks.

A new report by the Reserve Bank of Australia (RBA) published in their regular bulletin shows that households and business are storing so much cash with the major banks and pushing their funding cost at levels that can affect future interest rates.  The report says that major banks actually faced funding costs of 130 points higher than before the global financial crisis.

Although the RBA report also identified the volatile financial market as the cause of elevated funding costs, it does not discount the cost of deposits as a driving force behind the increase.

Each of the major banks currently offer term deposit rates of up to 125 basis points above the 4.25 percent cash rate. Prior to the global financial crisis, deposit rates were actually 200 basis points below the official interest rate.

Term deposits, invested typically between one and three years, now make up 45 percent of banks’ deposit bases compared with 30 percent prior to the global financial crisis.

The RBA says the increase was the result of consumers and businesses choosing to save, as well as the increased rates offered by banks.  Banks offered attractive rates to depositors as the federal government encouraged competition within the banking industry.

“Strong business profits and business caution have resulted in larger corporate cash holdings which have increasingly been invested in deposits rather than other financial instruments,” the RBA paper stated. “Households have significantly increased their term deposits placed directly with banks instead of investing in other financial assets.”

The big four banks faced both political and consumer criticism in February after raising their key standard variable interest rates by six to 10 basis points despite the official cash rate being left on hold by the RBA.

The banks explained back then that higher wholesale funding costs were squeezing their profit margins, and they had to decouple from RBA moves to balance their funding costs.

The big four banks held about $418.9 billion of retail deposits at the start of the year, an increase of 8.8 percent from the previous year.  Of which $303 billion were deposits of Australian businesses within the four major banks, an increase of 6.2 percent from the previous year.

The RBA figures show that growth rates both in household and business deposits are among the fastest in recent years and come at an uncomfortable time as the banks increase their domestic funding base.

The RBA report also noted that the major banks are now beginning to pay interest on transaction and basic savings accounts, which was also contributing to higher funding costs

“The increase in the value of funds invested in these deposits has largely been placed in online saver accounts and accounts with introductory bonuses and bonuses for regular deposits,” the RBA report stated.

Unfortunately, during tough economic conditions, people prefer to keep their money in deposit accounts rather than invest in volatile ventures. So either banks have to swallow the cost or people have to prepare themselves for interest adjustments in their deposit accounts.

In which case, consumers still have the upper hand as they can easily transfer their accounts to financial institutions with better interest rates, or simply ask their banks to put up.

The Bankmecu Incentive Saver account is the ideal way to boost savings. It’s also excellent for staying motivated and helping you stick to your savings goals.

Essentially, you commit to depositing at least $100 into your account each calendar month. This can be done in a lump sum, or in weekly instalments, whatever suits your own budget. As long as it adds up to at least $100 by the end of the calendar month, it’s fine. You can even deposit more from time to time if you can afford the extra amount.

Each month you do this, plus don’t withdraw any cash from the account, Bankmecu will pay you a bonus amount of interest on top of your regular interest rates. This helps to grow your savings that bit faster, plus it keeps you motivated to continue growing your savings balance rather than spending it.

The best part about this account is that there is no minimum account balance required in order to qualify for the bonus interest.

Rates and Fees

The rates and fees applied to the Bankmecu Incentive Saver account are as follows:

Accessing Your Savings

When you keep your money in an Incentive Saver account, it’s not locked away. You have the freedom to access your cash whenever you need it. Go ahead and withdraw any amount you need, especially if you’ve already reached your savings goal.

You can transfer your funds electronically to any other account. Simply log into your online banking account and transfer the amount you want into your regular transaction account.

Just keep in mind that you won’t receive any bonus interest on your savings during those months where you do make a withdrawal. Instead, your account will earn only the standard interest amount on any remaining savings for that month.

Maximising Your Savings

One of the biggest benefits of the Bankmecu Incentive Saver is that interest is calculated on the balance in the account on a daily basis. The interest owing to you is then added up and paid to you at the end of the month.

Obviously, if you leave your interest in your account, this gives you the opportunity to earn more interest on the interest you’ve already earned.

However, there is another way to increase your own interest payments each month and boost your savings a little bit faster. Remember, interest is calculated on your balance every day.

So, instead of making one monthly deposit of $100 to satisfy the Incentive Saver criteria, think about depositing $25 every single week (or whenever you get paid). This smaller amount makes it easier for you to budget from week to week even while you’re still keeping up with your savings goals. You can even automate how much is deposited by setting up an automatic salary credit that puts money into your savings account the moment you get paid.

You can also opt to electronically transfer additional funds from another account if you find you have some left over. Bankmecu will also allow you to deposit cheques into your account. Please remember you can’t withdraw proceeds of those cheque amounts until after they’re cleared.

No matter how you meet your savings goals, remember that every time you do make a deposit, your balance is increased just a little bit more. This will happen at least four times in each month. Immediately, Bankmecu will calculate how much interest you’re earning based on that increased balance amount.

Overall Verdict

The Bankmecu Incentive Saver account offers an excellent way to stay motivated and stick to a savings goal. The benefit of bonus interest for adding to the account and not making withdrawals is a great way to maximize savings and reduce temptation to spend. For any customer who wants to boost savings, this account is a good choice.

The Bankmecu Term Deposit Account provides a safe way for you to invest your money while still making an attractive and guaranteed return on your investment. Thus, you have the option of choosing the interest rate you prefer as well as the term.

Of course, at first glance you are likely to opt for the highest interest rate and might wonder why bother offering such a selection. However, the interest rate changes according to the duration of the term deposit, so that the longer you keep your money in the Bankmecu Term Deposit Account, the more you will make. Additionally, the interest rate increases with the amount. So, the higher your balance, the better the interest rate.

As with all investment products, the Bankmecu Term Deposit Account is governed by the bank’s commitment to investing in socially and environmentally responsible projects. As a signatory to the UN Environment Program Statement by Financial Institutions on the Environment, the UN Global Compact and UN Principles for Responsible Investment, Bankmecu prides itself on being dedicated to the community and giving back as much as possible.

The Bankmecu Term Deposit Account: Features

The Bankmecu Term Deposit Account offers customers flexible investment terms, allowing you to choose from a wide range of terms with a minimum of three months and a maximum of 36 months. Since you can open an account with as little as $500, you can start off as small as you like. The low minimum balance requirement is Bankmecu’s way of trying to encourage people to save money. Once you see your savings grow thanks to the great guaranteed rate of return, you will soon be hooked on saving money, which will only benefit you in the long term.

The rate of return on your investment is guaranteed since the interest rates are fixed. In other words, no matter what happens on the market, whether interest rates go up or down, you will still be able to enjoy the initial rate of return you signed for.

You also can decide on how your interest is paid when opening a Bankmecu Term Deposit Account. Thus, you can choose to have your interest paid at maturity, annually, every six months, every month or every two weeks. However, note that to take advantage of this feature, you need to have a minimum balance of $25,000 and the minimum term in 12 months for any option other than being paid at maturity or annually. Additionally, the rate drops as the frequency of the payments increases.

All deposits are guaranteed by the Australian Government free of charge under the Financial Claim Scheme. If your deposit exceeds $1M, though, the guarantee is optional and does come with a fee. However, it’s probably worth it, just so you don’t have to worry about anything unexpected happening.

The Bankmecu Term Deposit Account: How It Works

To open a Bankmecu Term Deposit Account, you need to submit an application. Once it has been approved by the bank, you will be issued a Certificate of Deposit after the fixed term deposit has been created within your account. Then, you just sit back and wait for your investment to start earning interest.

Two weeks before the maturity date, you will receive a letter reminding you that your deposit term is coming to a close and you will have to decide whether to reinvest or redeem your deposit.

Of course, the wisest course of action is to reinvest the money and the interest, which will allow you to earn even more, thanks to the concept of compounding. For example, a deposit of $5,000 for a three year term will earn a rate of 5.55% per annum. Thus, at the end of the three years, you will have approximately $5,900. If you leave it a further three years, then you are looking at almost $7,000 in total and that’s without you doing anything other than opening a Bankmecu Term Deposit Account.

Note that if, once you receive your notice, you do not respond to the bank with your instructions regarding the fate of your deposit, it will be assumed that you wish to reinvest your deposit. Thus, your Bankmecu Term Deposit Account will be renewed with the exact same conditions as the original investment.

The Bankmecu Term Deposit Account: Terms and Rates

There are a number of options when it comes to investment terms with the Bankmecu Term Deposit Account. Thus, for interest paid at maturity or annually, you have the following choices:

As you can see from the table above, the longer the term and the larger the investment, the higher the rate of return. Thus, to maximize your earnings consider making a deposit of at least $500 for 36 months.

While you have the option to receive your interest more frequently, remember that the interest rate will not be as attractive and, as you can see, you need to make a deposit of at least $25,000.

You also have the option of an Edvest regular income term deposit with interest payable every two weeks, with an interest rate of 5.15% and a term of at least 12 months up to 24 months. The minimum deposit is $25,000 and the maximum is $1,000,000. Another option is the Edvest deferred interest term deposit with a 4.55% interest rate between 6 to 12 months for deposits below $5,000 and 5.25% on anything over this amount. The minimum deposit is $1,000. Note, though, that this option is only available to customers who are at least 45 years old and you will be charged $18 every year.

In all cases, the interest rate on your Bankmecu Term Deposit Account is fixed for the duration of the investment. If you do want to withdraw the money early, keep in mind that an Early Withdrawal Policy applies.

The Bankmecu Term Deposit Account: Early Withdrawal Policy

If you want to withdraw your money early from your Bankmecu Term Deposit Account, you will receive a percentage of the interest equivalent to a percentage of the agreed upon term over the actual term of your deposit. In other words, if your deposit was for 24 months, originally, but you only left the money in the account for 12 months, then you will receive 50% of the interest paid on the principal amount.

If you don’t withdraw the entire amount, the remaining balance, which has to be at least $500, will earn the full rate of interest. Note, though, that these conditions apply only to Bankmecu Term Deposit Accounts with interest paid annually or at maturity.

For the other options, you have to give a 30 day notice to withdraw your money early and the amount you take out will be subject to an interest penalty period.

Overall Verdict

The Bankmecu Term Deposit Account is a great option for anyone who wants to maximize their savings but would rather avoid higher risk investments, like stocks, mutual funds and so on and so forth. With a fixed term deposit you might earn less money but at least your earnings are guaranteed and there’s no chance whatsoever of you losing your initial capital.

This fixed term deposit account offers highly competitive rates, compared to similar products from other financial institutions, and the flexible terms make it a great choice for anyone who wants to be in total control of their investment.

The Bankmecu Term Deposit Account is a low risk investment option with a guaranteed rate of return, making it a popular choice. It’s a great way to maximize your savings and the sooner you create the deposit, the more you will earn in the long run.

Christmas is a wonderful holiday and one everyone should enjoy with the people they care about. However, most of us don’t have such a relaxed holiday because we spend most of it worrying about the money we spent on presents and the debt we incurred to do it.

Unfortunately, very few people actually save for Christmas, and rely on their credit cards to pay for this holiday, which ends up costing a lot more in the long run. The Bankmecu Christmas Club Savings Account, though, can help you change this by providing you with a great way to save money specifically for Christmas.

Thus, you can only access the funds you have deposited in the Bankmecu Christmas Club Savings Account starting with the first working day in November. However, the accrued interest is only available starting with the beginning of December, when everything in your savings account is transferred to your access account. This way, you won’t be tempted to spend the money you are saving for Christmas on other things that suddenly seem very important because you have some money saved up.

The Bankmecu Christmas Club Savings Account: Features

The Bankmecu Christmas Club Savings Account has no minimum account balance requirements, meaning you can open an account with how much or how little money you want. Additionally, there are no penalties involved if your account balance drops below a certain level.

Bankmecu wants to help their customers save as much money as possible, which is why you won’t be charged anything for the management of your account. That way, you won’t have any fees eating into your savings.

Additionally, you can enjoy a great interest rate that will allow you to gain as much mileage as possible out of your savings. Thus, the Bankmecu Christmas Club Savings Account offers a 1.50% per annum interest rate, regardless of your balance.

Another benefit to the Bankmecu Christmas Club Savings Account is that you can enjoy free transactions up to $300 per year as a reward for banking with Bankmecu. This is a bank that is fully committed to having a mutually beneficial relationship with their customers, which is why they feel customers who trust them with their business should be rewarded. As a result, the more business you do with Bankmecu, the more fee free transactions you will be rewarded with.

Overall Verdict

Saving is hard at the best of times, which is why so many people resort to credit card debt to pay for things like Christmas. It’s a bit like saving in reverse and paying for the privilege to do so. Most people spend all year paying for their previous Christmas and it ends up costing them so much more because of the interest costs involved.

However, you can break this cycle by using the Bankmecu Christmas Club Savings Account and it really is a great solution, especially for people who have trouble saving money. The fact that you can’t touch the money until November might seem harsh but is probably one of the best features of this account because most of us simply can’t resist spending any money we have managed to save up. This way, though, you’ll be sure to have a nice amount of cash set aside for Christmas and also save a lot of money in the process because you won’t be going into debt to have a great holiday.

The Bankmecu mySaver Account was created with the express purpose of helping the youth of today understand the value of savings. In terms of a financial education, which would be so vital to any young adult, it’s actually one of the most overlooked portions of their education. In fact, most live by the motto: don’t worry, they’ll have time to worry about money later. Well, that is a big mistake because people shouldn’t have to worry about money, especially if they know how to manage it.

To this end, the Bankmecu mySaver Account is intended to help young people take the first step by starting to save early. Thus, you will be eligible for bonus interest if you deposit at least $10 into your account every month. However, note that you shouldn’t make a withdrawal during that month. There’s no need to worry though, because you can access your money anytime you like.

Watch your savings grow exponentially after you set up an automatic direct credit. Remember that you will always find something better to do with the money than putting it in a savings account. If it never hits your account, then you aren’t going to be able to spend it and will be forced to save money.

So, if you are tempted to withdraw the money from your account, remember that you won’t earn any bonus interest. Thus, really think hard whether you need the money or not.

The Bankmecu mySaver Account: Access

You can access your account via Internet banking or telephone banking. Thus, you can check your account balances and transactions, transfer money to other accounts, whether they are Bankmecu or belong to other banks. Additionally, you can schedule payments to be made in the future or set up recurring payments. You can also modify and remove any future payments, regardless of whether they are recurring or not.

Telephone banking offers you the same options, with the help of a consultant.

The Bankmecu mySaver Account: Rates and Fees

The good news is that there are no annual or monthly account management fees, allowing you to save even more money and making sure that interest is put to good use instead of paying banking fees.

The standard rate is 0.25% per annum with a 5.00% bonus interest rate. Note that this bonus is only available if you are under 25 and if you have made the minimum $10 deposit and haven’t made any withdrawals. Interest is calculated every day on the entire balance and paid on a monthly basis.

Overall Verdict

The Bankmecu mySaver Account is a great way to incentivize young people to save, so if you have been toying with the idea of setting up a savings account, this one would be perfect for you due to its flexibility as well as the bonus interest you receive.

Remember, it’s never too early to start saving and the sooner you do it, the more money you will earn thanks to compound interest. The Bankmecu mySaver Account makes it even more attractive for you to save money if you are under 25, so take advantage of this opportunity while you still can.

Overview

• Account type- Savings
• Access- Deposits are fixed for 7 days.
• Interest rate- Anywhere between 2.35% and 4.60% depending on your balance.
• Account fees- None

Features and Benefits

• Higher interest rates of up to 4.60% mean you’ll get a far better return on your savings – especially if you have a large amount to put away.
• No account management fees so your savings won’t be gobbled up by “admin” charges.
• Internet and telephone banking access so you can stay on top of your finances.
• You can still access your money instantly, as long as deposits have been there 7 days.

Higher Interest = Higher Returns

The Cash Management High Yield account from bankmecu gives those with at least $5000 to save the chance to earn much better returns on their savings. You can save as much or as little as you want, but there is a minimum transaction amount of $500 on withdrawals.

Although this is an easy access account your deposits are fixed for 7 days before they’re available for withdrawal. For that reason if you’re looking for an account where you can access your deposits immediately you would be advised to look elsewhere. This account is really being targeted at long term savers who’ll benefit more from the higher interest rates.

Bankmecu gives you 24 hour access to your account with Internet and telephone banking so you can check your balance, set up payments, or check the status of recent deposits. The Internet banking interface is very easy to understand, so even the worst technophobes will be able to use the site.

How to Apply

You can apply for a High Yield by contacting the bankmecu team, or by downloading an application form from the bank’s website.

Pros

• Higher rates of interest than the bankmecu Standard Cash Management account.
• Easy access once deposits have cleared.
• Telephone and Internet banking.
• No account management fees.

Cons

• Having to leave your deposits for 7 days before you can access them.

This Account Would Suit…

This account is best suited to you if you’re looking for a long term savings product. The higher interest rate means the effects of compound interest would take hold much quicker, giving you a better return on your investment.

Whilst you can access your money after 7 days, this account is really aimed at those who don’t plan on using the money they’re saving on a regular basis.

Those looking for an account that gives quick and easy access to deposits would probably be better to consider the Standard Cash Management account, but should be aware interest rates are slightly lower compared to the HIgh Yield.  

Account Overview

• Interest rate- 1% to 4.60% depending on how much money is in the account.
• Access- Instant
• Account keeping fee- $0

Features and Benefits

• Higher rates of interest than the Access account.
• Interest rates increase the more you save.
• Instant access to your money.
• An Internet only account helping you keep things simple.
• 24/7 access to your account online.

A better Way to Save

In our modern times it’s no longer necessary to visit your local bank branch, or to carry out your banking business by post. Internet only savings accounts are rising in popularity, and bankmecu rewards customers who open a Cyber Saver account by giving them much higher interest rates than their standard savings product.

The lowest interest rate available is 1% for savings of up to $4999. Anywhere between $5000 – $149,999 in savings will get you 4.50%, and anything above $150,000 fetches you a very attractive rate of 4.60%.

One of the best features of this account is it’s instant access so you can withdraw funds whenever you need to. You can even get your hands on money that’s just been deposited into your account (other than cheques which have to clear).

Your savings won’t be diminished by any monthly account management fees so 100% of what you deposit into your account will be there whenever you need it.

To have a Cyber Saver you’ll need to have Internet access, so this product will only be worthwhile if you’re a regular Internet user. Most modern mobile phones have extensive Internet access so you’ll be able to check into your account even whilst you’re on the move.

How to Apply

You can apply for your Cyber Saver account by downloading an application form from the bankmecu website, or by completing an online application. Being a savings account your credit score isn’t going to be too important, so even those with a poor credit history should apply.

Pros

• Instant access to your money.
• Higher rates of interest for regular savers.
• No account management fees.
• No messy paperwork to deal with.

Cons

• You do have to save a considerable amount of money in order to receive the highest interest rate available.

This Account Would Suit…

If you’re looking for a simple savings account with higher rates of interest this account will be ideal. Being an Internet only account means you won’t have to worry about regular paperwork, and you can access details of your balance and transactions anytime of day (or night) wherever you are in the world. You just need an Internet connection.

This account is also suited to those with larger amounts of money to save. The more you save with the Cyber Saver the higher your rate of interest, making this the perfect low risk savings product.

Bankmecu Telephone Banking allows customers to perform a wide range of activities, including purchasing insurance and foreign currency, applying for a loan or performing a wide range of transactions on any of their accounts. However, to access accounts, customers need to provide their personal password since security is vital when personal and financial details are involved.

To access the Bankmecu Telephone Banking service, you simply need to call 132 888 or +61 3 9854 4666 if you are overseas. Note that standard charges for the call apply and it might be slightly more expensive if you are calling off a mobile phone.

Automated Telephone Banking: Access to Your Accounts 24/7

Your first thought might be that you will have trouble getting through to the Bankmecu consultants outside of business hours so you’ll probably have to find a computer, especially if you are overseas. Well, with the automated Telephone Banking service, this is not an issue because you can do your banking round the clock, on any day of the week, from wherever you are.

The automated Telephone Banking service allows customers to listen to current account balances for their accounts, check account transactions, make transfers of maximum $50,000 to other Bankmecu accounts, pay bills using BPAY, set up future and recurring payments, learn the interest earned on accounts for the previous financial year, order account statements and find out details of personal cheques that have been presented.

You can use the same number as above and then follow the instructions. Note that you will need an Access Code to use this service, which you can get by calling 132 888 and following the instructions.

Staff-Assisted Telephone Banking

If you have more general questions or simply want the transactions to be performed by a Bankmecu consultant, all you have to do is call 132 888 between 8:00 AM and 6:00 PM (AEST), from Monday to Friday, when they are available to help you with whatever you need.

You can perform the following activities via Bankmecu Telephone Banking:

• General account enquiries
• Get account transaction information
• Change your address
• Transfer funds from your accounts to other accounts or to another one of yourse
• Open and close an account
• Change, start or cancel a periodical payment
• Change existing payroll deduction or whole pay break-up;
• Open a new term deposit or renew it
• Full or partial redemption of a term deposit
• Cancel and replace lost, stolen or damaged cards
• Ask for a stop payment for a customer cheque
• Complete a minimum $500 mortgage redraw
• Send a corporate cheque to your home
• Send a fax of all account transactions to a certain fax number
• Add or remove the sweep facility
• Change or cancel direct debits
• Alter the account linked to a Redicard, Redicard PLUS or Visa card
• Electronic transfers

While this list is not exhaustive it is comprehensive. However, if you need something else, all you have to do is ask. Note, though, that you will need a Passcode or you won’t be able to do more than make general enquiries. You can obtain a personal passcode by downloading the Bankmecu Telephone Banking Passcode application, which you then need to fill out and send to the bank. The Personal Passcode is just like a PIN, which means you need to keep it to yourself.

Applying for a Loan

You can also apply for a loan via Bankmecu Telephone Banking. Simply call the bank during business hours and a loan consultant will be happy to help you. To make things go as smoothly as possible, make sure you have the following information handy:

• Current net income, or income information for the last 2 years tax returns if you are self-employed;
• Information on all assets and liabilities, including shares, motor vehicles, personal effects, superannuation and bank accounts;
• Driver’s licence number;
• Current employment details;

Note that the process takes approximately 20 minutes, so make sure you have the time. If not, you can call and set up an appointment. The Bankmecu loan consultant will contact you at the specified time, though you still need to free up those twenty minutes and ensure you have all the information handy.

Taking Out Insurance via Bankmecu Telephone Banking

You can also take out insurance via Bankmecu Telephone Banking. If you want to learn more about what’s on offer, call 132 888, to ask what’s available and get a quote, with no obligation to buy. Specialised consultants will help you figure out what options are best for you and devise the best solutions. An insurance premium can be issued by phone.

Buying Foreign Currency

Thanks to the partnership between Travelex and Bankmecu, you now have access to foreign currency via Bankmecu Telephone Banking. Thus, you gain quite, easy and secure access to foreign currencies as well as relevant services that meet your requirements. You can buy Travelex foreign currency, travelers cheques and Cash Passport cards, simply by calling 132 888 and following the instructions to get to the foreign exchange service desk.

Using Bankmecu Telephone Banking

Unlike Internet banking, with Bankmecu Telephone banking, there’s no need for you to open a special account. However, you will have to get a passcode to use the staff-assisted service, so make sure to download the application and send it. Otherwise, you just have to call 132 888 and you’ll get all the help you could possibly need.

Overall Verdict

The Bankmecu Telephone Banking service is invaluable, especially to people travelling overseas without access to the Internet. This way all transactions can performed via phone and a lot more. It’s also an excellent service for people who prefer dealing with other people rather than just a computer, so if you would prefer to hear some advice as well, then Bankmecu Telephone Banking is definitely for you.

Bankmecu Internet Banking not only is highly convenient but also extremely secure. You’ll never have to worry about unauthorized transactions or anyone getting hold of your account details or other personal financial information because the system is completely secure.

With Bankmecu Internet Banking you can view account balances, view and download a report of all the transactions on your account, transfer funds electronically, view interest earned on your accounts and much more.

In the day and age of information and convenience, internet banking is definitely the way to go. It not only saves time but also money because many operations are cheaper to perform via internet banking as financial institutions are trying to encourage their customers to jump on the digital bandwagon. Of course, it’s understandable since the costs are also lower for the bank when you perform all your banking operations from home.

Thus, if you have a hectic life and barely have time to breathe, let alone handle payments during business hours, the easiest and most convenient option is to activate Bankmecu Internet Banking.

Bankmecu Internet Banking: Features

As is to be expected, Bankmecu Internet Banking is a highly secure system allowing you access to all your accounts. You can perform multiple operations and see all your financial information at a glance.

Security

The Bankmecu Internet Banking system uses the industry standard HTTPS to ensure a secure connection that cannot be hacked is established and maintained between your computer and the internet banking server. Every transaction is encrypted and authenticated so that there is no chance of anything going wrong and your privacy is maintained. Bankmecu also employs digital identification certificate technology with VeriSign Inc.

Each time you access internet banking, make sure you see a locked padlock in the bottom status bar which indicates you are accessing a secure site.

To further increase security, there is a time limit on your session. Thus, if you have logged in but haven’t touched your account for ten minutes, you will automatically be signed out to protect your information. To log back in, you have to reenter your customer number and net code.

If you make a mistake when you enter the net code, you can try again twice, for a total of three attempts. If you make a mistake on all three attempts, your internet banking account will be temporarily blocked so you can’t do anything for the remainder of the day. The ban will be lifted at midnight and you can then access your account by entering the right customer number and net code.

Don’t Reveal Account Details!

There is a possibility that you may receive an email claiming that Bankmecu or some other financial organization needs you to verify your account details. Don’t even think about it!

While these emails and the sites in question can look quite professional, they are nothing but an attempt at getting hold of your personal financial information. A financial organization will never email their customers asking them to confirm their account details.

So, no matter how professional an email looks or how similar the site is to the real thing, never enter your account details. In fact, just delete the email and forget about it. However, if you’ve already put your financial information in, then call Bankmecu at 132 888, so the bank can reset your account security information.

Remember, to avoid problems, never give out any personal details via email and especially not financial information.

Banking with Bankmecu Internet Banking

The whole point of Bankmecu Internet Banking is convenience, which is exactly what you get when you activate your account. With an internet banking account, you can see the current and available balances for every account you have, including investment and loan accounts, transaction accounts as well as savings accounts.

You can also view all the transactions on each account and download reports in various formats so you can transfer them to software programs like Quicken, Excel and Microsoft Money, depending on the software you prefer.

Transactions can be organized and downloaded according to transaction type and by date ranges for every account you have, making it easy to process the information.

You also have the ability to transfer funds electronically with Bankmecu Internet Banking between your own accounts, to other Bankmecu accounts or to accounts at other financial institutions.

You can also set up transfers so they take place on auto-pilot at a future date from the account of your choice. You can check the Periodical Payments section of your Internet Banking account to see what payments are coming up since that’s where they are displayed until they occur. If you’ve made a mistake, though, don’t worry because you can easily delete or change a scheduled transfer at any time before it takes place.

When you log into your Bankmecu Internet Banking account, you will also be able to see how much interest each of your accounts have earned for the current year to date as well as for the previous financial year.

BPAY Bill Pay Service

With BPAY, you can pay your bills via Bankmecu Internet Banking or via Telephone Banking. A wide range of bills can be paid, including telephone, gas and water or council rates. If the bill has the logo on it, then it’s fair game.

The advantage is that paying using BPAY is free, so you won’t be charged any fees for these transactions. Note that you will need the biller code and the customer reference number to make the payment.

You can also schedule BPAY payments to take place at any time in the future from the account you specify. Another option is to set up recurring transfers if you have certain bills that come regularly and would rather not have to worry about. For example, you can set up weekly payments for the next 16 weeks or indefinitely, depending on what you need.

Note that all pre-scheduled BPAY payments can be modified or deleted at any point before they are completed.

Internet Only Savings Account via Bankmecu Internet Banking

As a Bankmecu Internet Banking user you will have exclusive access to a savings account that is solely based on the internet. The Cyber Saver account comes with a more attractive interest rate on a balance exceeding $5,000 in comparison to other Bankmecu savings and transaction accounts. However, note that you will not receive interest if the balance is below $5,000.

To open an account, all you have to do is fill out the Cyber Saver application.

Overall Verdict

Bankmecu Internet Banking makes life much easier, whether you simply want to know what your account balance is or you are looking to keep a tight reign on your finances and need constant information. It’s a time saver and allows you to be fully informed at all times regarding your finances. If you haven’t yet gotten your own internet banking account, you really need to give it a go. It might seem daunting at first, but the system is simple to use and you’ll soon wonder how you ever did without before. Being able to make payments and see the status of your accounts at any time of the day or night from the comfort of your own home is priceless.

Bankmecu offers its customers a number of ways they can access their funds from their mortgage offset, deeming and access accounts. Of these, customers can opt for two different debit cards: the Bankmecu Visa Access Card and the Bankmecu Redicard. Depending on your lifestyle, you can opt for one or both of these.

The Bankmecu Redicard PLUS offers you access to any funds you have in your bank account. In other words, you can only use the money you actually have in the account, which is why you won’t be paying interest at any point. With the Redicard, you can withdraw cash from an ATM in Australia, and a few in the rest of the world. You can also use EFTPOS terminals in retail stores and supermarkets to pay for your shopping.

The Redicard makes everything extremely convenient because you can withdraw and deposit money in over 3,400 locations, using the Australian Post network. And accessing your money is completely safe because each Redicard PLUS is issued a unique Personal Identification Number (PIN), which ensures complete security when using EFTPOS terminals, Bank@Post or ATMs.

Note, though, that when you are withdrawing cash from an ATM that belongs to a bank you don’t work with, you will have to pay a Direct Charge fee. Thus, you should avoid using other ATMs as often as possible, to avoid wasting money on pointless fees.

The Bankmecu Redicard: Rates and Fees

As already mentioned, the Bankmecu Redicard doesn’t have any interest charges since it is a debit card. It is a simple payment tool allowing you to conveniently access your own money.

In terms of fees, there are only a few:

As you can see, the fees are relatively low, making the Bankmecu Redicard an excellent option for anyone looking to save as much money as possible.

The Bankmecu Redicard vs the Bankmecu Visa Access Card

Besides the Visa Access Card’s higher fees, the only important difference between these two cards is really accessibility, especially overseas. While the Bankmecu Redicard can be used across Australia with no problems, once you travel overseas things change somewhat. Thus, if you travel rarely, then you are better off sticking with the Bankmecu Redicard PLUS due to the fact that it is cheaper.

On the other hand, if you travel quite a bit, then you might consider getting both cards and use the Redicard domestically while keeping the Visa card for overseas use. It’s up to you, but keep in mind the costs involved to help you make the right decision.

The Bankmecu Redicard and Your Accounts

Like the Bankmecu Visa Access Card, the Bankmecu Redicard offers you access to all Bankmecu accounts, namely the Bankmecu Access Account, the mortgage offset account and the Bankmecu Deeming Account.

Reporting a Stolen Card

You can report the loss or theft of your Bankmecu Redicard by calling the Visa hotline at 1800 224 004 or (02) 9959 7480, round the clock, every day of the week. Your card will immediately be cancelled so you don’t have to worry about unauthorized transactions.

Overall Verdict

The Bankmecu Redicard is the perfect option for anyone who doesn’t need the overseas accessibility that a Visa card offers. It’s the best solution to access your funds conveniently because it does feature lower fees than the Visa card but comes with all the same benefits.

As with any card, the Bankmecu Visa Access card makes it extremely convenient for you to access your funds. Thus, whether you want to make direct payments for purchases or bills or you would rather withdraw cash, you can do it easily with your Visa debit card. You don’t have to go to your local Bankmecu branch to withdraw cash nor do you have to fiddle with bank transfers to make a wide variety of payments. Simply whip out your card and in moments you are done.

If you are travelling, there is no better way to take your money with you. You have instant access to your funds no matter where you are in the world. Note that you will be charged a Direct Charge fee if you use another financial institution’s ATM so your best option is to use a rediATM when possible since you won’t be charged anything to withdraw cash. Otherwise, you can make payments using your card via EFTPOS at any outlet in the world featuring the Visa sign.

The Bankmecu Visa Access Card: Rates and Fees

Since the Bankmecu Visa Access Card is a debit card, you won’t be charged any interest rate. A debit card simply offers you easy access to your own funds, located in your deeming, access or mortgage offset accounts. Thus, any transactions performed with the Bankmecu Visa Access card are interest free.

In terms of fees, the monthly card management fee is highly competitive, at only $1.65 per card. That’s basically it since transactions performed with Visa debit cards are free, if you are a credit purchase option user, then you can enjoy low fees when using your debit card. The fees you can expect to pay are as follows:

As you can see, the fees are highly competitive and are definitely worth the convenience of having access to your funds at all times from anywhere in the world with a Bankmecu Visa Access Card.

The Bankmecu Visa Access Card and Your Accounts

The Bankmecu Visa Access Card is available for the Bankmecu Access Account, the Bankmecu Deeming Account and the Bankmecu Mortgage Offset accounts. Thus, no matter what type of account you have, you can gain quick and convenient access to your funds at any time of day and night, from anywhere in the world.

The Bankmecu Visa Access Card: Reporting a Lost or Stolen Card

In the event that your card gets stolen or you lose it, simply call the Visa hotline at (02) 9959 7480 or 1800 224 004. The hotline is available 24/7 and once you inform Visa that your card is missing or that there have been unauthorized transactions, it will be cancelled immediately. Another option is to call Bankmecu at 132 888 during business hours.

Overall Verdict

The Bankmecu Visa Access Card is definitely a popular choice simply because of the convenience it offers. With the Visa card in your pocket, not only do you escape the pain of carrying cash around but it also means that you always have access to your money. Paying for purchases and bills is also much easier and faster. The low fees also make it an attractive option and ensuring the safety of your money, in case something happens, is definitely worth the small price you have to pay for the convenience of a Bankmecu Visa Access Card.

If you find internet banking too complicated and would rather avoid plastic altogether, Bankmecu has a solution for you and that is the Bankmecu Chequebook Account, which allows you to link a cheque book to your account. Thus, you can write personal cheques for any purchases or payments you want to make and the amounts are withdrawn from your account when the cheques are charged.

Bankmecu offers this service on two of their accounts, namely the everyday savings account also known as the Bankmecu Access Account and the Bankmecu Cash Management – Transaction Account. However, the bank does specify that if you are regularly making payments for bills or purchases via cheque, you might want to consider using a Visa card or BPAY.

The Bankmecu Access Account: An Overview

While having a Bankmecu Chequebook Account is an excellent option for anyone who prefers to conduct their financial transactions in a more traditional fashion, to make the right decision regarding which type of account you should opt for, you need to have more information on what’s available.

Thus, one of the bank accounts offering cheque book access is the Bankmecu Access Account. It is a savings account that is highly flexible, offering access to your funds at any time, day or night, no matter where you are in the world. Besides cheque book access, you also have the option to access your funds via a Visa Access card or Redicard PLUS. This way, you can withdraw cash from basically any ATMs in the world or pay for purchases via EFTPOS.

Additionally, you can make deposits via cash or cheque and withdraw money from more than 3,200 Australia Post outlets across the country. Just check for the Bank@Post sign and if it’s present, you’re in business.

You can also access your account, to view your balance or make various transactions, via internet or telephone. Thus, you can transfer money between your own Bankmecu accounts or make payments into any account at another financial institution. You can also schedule payments and transfers so that they are made at any time in the future.

The Bankmecu Cash Management – Transaction Account

Another Bankmecu Chequebook Account is the Bankmecu Cash Management – Transaction Account. This is a savings account with a twist, in that you can enjoy the generous interest rates of a savings account but with the flexibility of a current account. Thus, you can withdraw money the moment it has been deposited in the account or once your cheque has cleared.

Fees and Charges

The following fees apply to using a cheque book linked to your account:

Overall Verdict

If you prefer using a cheque book, then the Bankmecu Chequebook Account is definitely for you. No matter what your reasons, whether you find it easier to balance a cheque book than to use plastic or internet banking, or you simply like the tactile sensation of writing a cheque, it doesn’t matter because Bankmecu has you covered.

The fact that Bankmecu offers the Bankmecu Chequebook Account is proof that this financial institution really is one that puts their customer first by catering to anyone’s needs and desires when it comes to their banking needs.

The Bankmecu Cash Management – Transaction Account is designed specifically for people who have savings but would rather not block their money in a managed fund. Thus, with this account you can still earn a high rate of interest but can enjoy the complete flexibility of being able to access your money at any time.

There’s nothing worse than locking your money up in a managed fund or a traditional savings account because it seems that Murphy’s Law has a habit of kicking in the second you set up the account. Something happens and you need some cash urgently but there’s nothing you can do because it will cost you an arm and a leg to access your own money!

On the other hand, if you want the flexibility of being able to access your money at any time, you are usually stuck with low interest current accounts. However, the Bankmecu Cash Management – Transaction Account offers the perfect marriage between the flexibility of a current account and the high interest rate offered by savings accounts.

The Bankmecu Cash Management – Transaction Account: Features

The Bankmecu Cash Management – Transaction Account allows you to access your money as soon as you have deposited in the account, with the caveat that if you’ve made your deposit by cheque, you will have to wait for it to clear. Considering, though, that this is a type of savings account, this shouldn’t pose a problem, especially since with most savings solutions, you have to wait months before you can touch your money.

Besides the flexibility of the account, one of the main attractions of this account is the high interest rate it offers. Thus, you can earn between 0.45% and 3.2% per annum, depending on the size of your account. Additionally, interest is calculated on a daily basis on the entire balance of your account, so that your earnings are maximised and you don’t lose out on even a single day.

The Bankmecu Cash Management – Transaction Account is free, meaning that there are no account management fees, so your savings will be intact and you don’t have to worry about watching your account diminish instead of increase. There is nothing worse than watching most of the interest your savings are earning flow out on fees and other charges.

Note, though, that to open a Bankmecu Cash Management – Transaction Account you need to make a minimum first deposit of $5000. Subsequent deposits are not limited by a minimum.

The Bankmecu Responsible Savings Policy

Bankmecu has made a commitment to invest your money in projects that are both socially and environmentally responsible. The bank is a signatory to a number of programs supporting sustainable development, including the UN Environment Program Statement by Financial Institutions on the Environment, UN Global Compact and UN Principles for Responsible Investment.

Additionally, Bankmecu has entered a covenant with the Victorian State Government, which guides the bank’s policies in regards to improving the value offered to customers and sustainable development.

Overall Verdict

The Bankmecu Cash Management – Transaction Account is a great option for anyone looking for a flexible savings account. Its competitive interest rates make it an excellent choice if you have savings but don’t want someone else dictating when you can access your own funds. Along with Bankmecu’s socially and environmentally responsible approach to investing, opting for this account is really a no-brainer.

When you apply for a Bankmecu mortgage, chances are it will be a regular Principal and Interest type of home loan. This means each monthly payment you make is broken down to include an amount that will cover the interest charges and an amount that is repaid off your balance.

For most people and most banks, this is the standard type of mortgage available. The only real way to get ahead is to pay a little extra on the amounts you pay each month. That little extra gets paid off your balance and helps to cut your balance a little further each time.

However, when you attach a mortgage offset account to your Bankmecu mortgage, you have the opportunity to really put your home loan reduction plan into action fast.

Keep in mind that your offset account is a completely separate account from your home loan account. It’s very similar to a regular transaction account or savings account, except it is interlinked with your mortgage.

Because of the link to your mortgage, you won’t earn any interest on the savings you have sitting in your offset account. Instead, you have the benefit of reducing the amount of interest you pay on your home loan debt.

Rates and Fees

The rates and fees applied to the Bankmecu Mortgage Offset account are as follows:

Please keep in mind that separate rates, fees and charges may apply on your mortgage account.

What Types of Mortgages Can Link to the Offset Account?

Bankmecu will happily link a mortgage offset account to all of the Premium home loans, package loans and the goGreen Home Loan. This includes home loans for personal residential use and for investment use.

The Basic Home Loan, Fixed Home Loan and Bridging Loan cannot have an offset account linked.

How the Bankmecu Mortgage Offset Account Works

The Bankmecu Mortgage Offset account acts as a normal savings account or transaction account. Ideally, you have your entire salary deposited into this account every pay period and leave as much as you can in there to have the greatest effect.

While that money is sitting in your offset account, the link between this account and your mortgage tells the bank that your savings are to offset the interest charges accumulating on your mortgage.

Essentially, this means the interest you pay on your outstanding home loan balance is reduced by the amount of savings you have built up in your linked account.

For example:

If you have a mortgage of $200,000 and you have $10,000 built up in your offset account, your interest costs will be calculated as though you only owed $190,000.

Remember, you’re still making your regular Principal and Interest repayments each month on your mortgage account. This means a part of each payment covers interest charges and a portion pays a little bit off your balance.

If you have savings sitting in your offset account, you have the opportunity to alter those portion amounts. As you’re being charged less interest, the amount you’re paying off your balance is increased as a result. This lets you actively see your home loan balance reducing faster with each passing month.

Accessing Your Money

The money you leave sitting in your offset account is just savings. You’re able to access it at any time using a Bankmecu Redicard PLUS for ATM or EFTPOS transactions, or via a VISA card.

Making the Most of an Offset Account

Choosing to have your entire salary deposited into your offset account each time you get paid means you’re actively reducing the amount of interest Bankmecu can charge you on your home loan.

As you need to pay bills, you’re able to withdraw the money you have sitting in the account. However, by leaving as much as possible in the account for as long as you can, you have the benefit of reducing your interest charges that little bit more.

The object here is to always aim at spending less than you earn. This way, your offset savings balance grows each month. The interest charges on your mortgage are reduced each month as a result, which leads to a much faster way to repay your home loan.

Things to Watch For

A Bankmecu Mortgage Offset account is not generally suited to those customers who tend to spend everything they earn. Leaving an offset account empty on a regular basis simply won’t be any benefit to you.

Likewise, if you’re the type of customer who gets tempted to spend any savings immediately, it may be wiser to lock a little money away in a term deposit account. You may even find that choosing a Basic Home Loan and opting to make extra repayments could be more beneficial.

Overall Verdict

The Bankmecu Mortgage offset account is a brilliant way for disciplined home owners to build up savings quickly and to make real progress on debt reduction tactics.

The $8 a month account fee might seem steep, but this can be easily offset by the savings to be made on interest charges on your mortgage.

Account Overview

• Account type- Savings
• Access- Instant
• Interest rate- 0.10% – 4.50% depending on how much is in your account.

Features and Benefits

• A special account only for those who meet Federal Government’s Social Security Deeming provisions.
• Instant access to your money whenever you need it.
• $0 minimum balance to open or maintain your account.
• Withdraw your money from ATM machines using a VISA Access card, or Redicard PLUS.

A Great Savings Option

The bankmecu deeming account is a great option for the more mature saver. Deeming is considered the fairest way to assess someone’s income from their financial investments like shares and savings accounts.

This assessment helps determine how much of a government pension someone will get, based on the amount of income they’re “deemed” to have from their investments.

The bankmecu deeming account offers savers instant access to their money, and takes all the hassle out of getting hold of it. You won’t have to go into a local branch anymore to withdraw funds. Your VISA Access card gives you the ability to withdraw funds from most ATMs at home and abroad so you’re never far away from your money.

You can also pay for purchases with your card, as well as being able to withdraw funds from any of the 3200 Australia Post outlets around the country.

Unlike some savings accounts there is no minimum deposit required to open your account, and there’s no minimum balance required to maintain your account. Save as much or as little as you want, safe in the knowledge your money is there for you whenever you need it.

How to Apply

Simply call the bankmecu team, email them an enquiry, or download an application form from their website and complete it at your leisure.

Pros

• Instant access.
• No minimum balance required.
• Withdraw money from ATMs.
• Interest calculated daily.

Cons

• Higher potential earnings from a non-deeming account.

This Account Would Suit…

Being a deeming account, this product from bankmecu is aimed at those of retirement age or anyone who meets Federal Government’s Social Security deeming provisions. Whilst deeming accounts can be a good option for those who enjoy an average income from their investments, you should bear in mind you could find bigger returns from other bankmecu products.

Deeming accounts are an option, and are by no means obligatory so they should be looked at and considered alongside any other investment or savings account. If you’re unsure about how deeming works and want a more indepth explanation, information can be found at the Federal Government website.

Account Overview

• Account type- Savings
• Access- Instant
• Interest rate- 0.25% to 1.00% depending on the amount saved.
• Account keeping fees- None

Features and Benefits

• Free instant access to your money whenever you need it 24 hours a day.
• Visa Access card which allows you to access your money from any ATM machine home or abroad.
• Deposit or withdraw cash from any of 3200 Australia Post outlets.
• Free telephone and Internet banking access so you’ll never be out of touch with your account.
• The interest rate increases the more you save.

Straightforward Savings

The bankmecu Access account does exactly what it says on the tin. It’s simple to run, and with no account keeping fees it’s cheap to operate.

The account gives you 24 hour access to your money, and with a Visa Access card that allows you to withdraw funds from any ATMs you’ll be able to get your hands on your cash wherever you are. If you live near an Australia Post outlet you can deposit or withdraw money from there too. You’ll find 3200 branches around the country so no matter where you are you’re never far away from access to your account.

24 Hour access to telephone and Internet banking means if you’ve forgotten about a bill that needed paying and it’s the middle of the night you can simply log on and deal with it. The best savings accounts give you easy instant access and full control of your money. The bankmecu Access account does both.

How to Apply

To apply for this account you can either contact bankmecu via telephone, or go to their website and download an application form from there. Make sure you have all your important income and expenditure details, along with suitable ID. This will speed up the application process.

Generally your credit score doesn’t come into play when opening a savings account so this is one instance where prior debts shouldn’t hamper your application.

Pros

• Easy access.
• No account fees.
• Withdraw money at ATMs.
• Internet and telephone banking.
• Higher interest rates for regular savers.

Cons

• To benefit from the top rate of 1.00% interest you need to save over $100,000.

This Account Would Suit…

If you want a basic savings account that gives you no fuss access to your money then the bankmecu Access account is for you. Whilst the interest rates aren’t huge unless you save a sizeable amount of cash, this account is ideal for anyone looking for a safe place to put their money without the frills.

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So how come most Aussies don’t feel positive about their future? Maybe we first have to understand that fear doesn’t serve us well. Fear serves the politician’s interest and it drives media ratings, but in order to be financially successful we can’t let fear drive us.

If we ask Aussies now how life was five years ago, most would say nothing much has changed, or maybe life was better back then.  Wouldn’t we all want life to change for the better?  Scott Pape, finance columnist from the Herald Sun, says the best road to a positive change is to stop worrying about thing we can’t control and instead focus on a five-year plan.

In five years you can grow your super by $250,000.  A couple over 50 with less than a $500,000 balance have an opportunity to contribute up to $50,000 a year pre-tax into super.  Make it a balanced fund of part cash and majority growth assets with minimum fees, and in five years the couple can have an extra $250,000 in super.

In five years you can build an entirely new career.  There are among us people who work to complain. They complain about their boss, complain about their job, and complain about their co-workers; it’s as if complaining is part of the job description.

Guess what, complainers don’t move on.  They were there when you arrived and they’ll still be there when you leave for greener pastures.  Don’t be like them. In five years you could gain a new qualification, learn a new skill, and dramatically increase your earning power.  With a five year plan you can be on your way to doing something productive with your life.

In five years you can buy your dream home.  Houses may be outrageously expensive, but if you want to buy a house, you should buy a house.  Open up a First Home Saver Account and get a government-guaranteed 22.5 percent return on the first $5500; every dollar after that should be put into a high-interest online savings account, earning around 5.5 percent.

An old-fashioned idea worth putting into action is for a young couple to live off one wage and save the other. Consider that a couple earning $120,000 combined should be able to live off $60,000 a year and save the rest.  In five years you’ll have $200,000 – a very nice deposit on your home.

In five years you can bump off ten years and $100,000 from your mortgage.  The bank may offer you 30 years to pay off your loan, but it doesn’t mean you need to take that long.  Pay an extra $500 a month off your mortgage, and you can slash 10 years off the loan and save over $100,000 in interest.

It’s compounding interest in reverse, working to your advantage. Once you’ve settled your mortgage you’re on your way to becoming independently wealthy.

In five years you can start compounding your wealth.  Compounding interest is the greatest financial force on earth. In order to work, it needs time with small amounts of money.

However, most people never get themselves into a position to make compounding interest work to their advantage. Investing $1,000 today and adding $500 a month could be worth $40,000 in five years, and $330,000 in 20 years.

We can’t control the future, but we can control our actions. Focus on a five-year plan and stick to it, it will surely turn your financial life around.

According to the Reserve Bank of Australia’s (RBA) data, the overall savings of Aussies is around 10 percent of their household income. It is approximately $5300 per year on the median salary – this is by far the highest savings-to-income ratio in the past 20 years.

While Aussies have been saving for bigger targets such as a car, a down payment on a home, a holiday, or a college fund, better packages on savings and term deposit accounts also contribute to the increase in savings. However, some financial experts raise the issue of using the disposable to better use. For instance, if you had a windfall, an extra $5000 or $10,000 in your wallet, what is the best use for it?

Determining what to do with your spare money will rely on your financial conditions. Just as applicable investment options vary from person to person, better use of your money will be based on your needs.

Take for example a $10,000 cash windfall, you can invest it in an online savings account at 6 percent p.a. or in a term deposit account for at least 5 percent in 6 months, but if you have current debts such as a $10,000 credit card balance or a $20,000 car loan, then loan repayment should be prioritised. When you repay your credit card balance, you avoid paying at least $1,000 in interest or save $3,500 in loan repayments if used to to pay off the car loan compared to earning only $600 when put in a term deposit account. That’s a huge difference in savings.

However, options differ if you are debt-free especially when nearing retirement. Alternative investment options can be considered such as boosting superannuation, getting a self-managed super fund, or investing in properties or shares. For instance, with your $10,000, you can acquire a 95 percent loan and buy a $200,000 property or partner with a friend or relative and buy a property worth $400,000 or less. Granting good rental return on the property and capital growth, the profit could easily outweigh a savings account’s earnings within a few years. Although these options are relatively safe investments, if you are uncertain of your future finances, you can settle for the time-tested type of investment – savings accounts.

Savings accounts are great options too. Nonetheless, you must remember the conditions that apply to term deposit or high interest savings accounts to maximise your earnings. Although rates can go as high as 6.10 percent, high interest savings accounts may require you to make regular deposits and prohibit you from making withdrawals. So, before you decide which option is best for your money, you must do your research. Take advantage of online calculators to be able to compare your options and get a rough estimate of your possible earnings and savings.

An analysis of three-month term deposit rates carried out by Canstar Cannex for The Australian revealed that the sharp increase in rates is hitting the banks, even as consumers are benefiting from high savings interest rates.  The analysis shows that the major Australian banks are paying at least double the rates for retail deposits compared with those at the start of the global financial crisis, as the big banks cut back their reliance on volatile wholesale funding markets.

In September 2008, just as the global financial crisis was about to erupt, cheap wholesale funding allowed the Australian banks to keep their deposit rates low. The official cash rate at the time was 7 percent and only Westpac and ANZ were offering term rates above that amount.

However, term deposit rates have soared as financial markets remain volatile and costly due to the European sovereign debt crisis. Commonwealth Bank’s 5.4 percent three-month rate is 115 basis points above the 4.25 percent official cash rate while ANZ, NAB and Westpac have rates 125 basis points above the benchmark.

The increased term deposit rates come as cautious consumers turns Australia into a nation of savers. As consumer pull back from spending, the domestic savings rate has reached a two decade high. Analysis shows that the sharp rate increases coupled with the persistently high costs of wholesale funding are crimping banks’ margins.

As banks seek to improve their margins, term deposits from the big four are expected not to increase much further as banks wind back what have been aggressive programs to build their capital bases.

Finance experts say that smaller banks and credit unions will remain the best option for depositors looking to get better deals on interest rates.

‘‘I would not expect to see deposit rate increases at the big banks in the short term,’’ said finance columnist Damian Smith. ‘‘Most of the big four are well off the market leader on six-month money.’’

According to Smith, the leading term deposit offers come from Investec which has been offering 6.1 percent and ING with 6 percent on a six month term. Keen observers say the banks led by Westpac, pursued investors with special offers on term deposits to shore up their capital bases in anticipation of higher funding costs.

‘‘Westpac had quite a big shift in its long-term (deposit) rates late in 2011,’’ said Adam Beu, analyst with data provider Cannex. ‘‘They have to compete for deposits and in order to do that they offer some interesting rates. That’s possibly been to fill the funding gap the banks have been complaining about.’’

Westpac’s head of Australian financial services, Peter Hanlon, says the banking sector was facing the dual storm of high deposit prices and increased wholesale funding costs.

‘‘There has been a material change in the past four months, with the cost of term deposits to us increasing by 30 basis points while wholesale funding has risen significantly,’’ Hanlon said.

‘‘The competition is placing upward pressure on deposit pricing, as all Australian banks look to secure more of this type of funding,’’ a NAB spokeswoman said.

The big four have all lifted their mortgage rates and had been raising deposit rates. Westpac raised the interest rate on their six-month term deposit by 175 basis points from 3.75 percent to 5.5 percent on January 20. That followed similar adjustments that took place in December 23 where Westpac raised the interest rate on its one-year term deposit by 125 basis points from 3.75 percent to 5 percent and the rates on the five-year term deposit by 140 basis points from 4.5 percent to 5.9 percent.  The NAB claims its deposit costs have risen by 23 basis points in the past six months.

Smith says that deposit rates at the big banks won’t get much better than they already are as the banks shore-up their margins.  Savvy savers are advised to seek smaller banks and credit unions for better term deposit rates.

Talking about money is very important between couples in order to bridge their differences.  Understand that financial management is not just debt management. Financial management is more about accumulating wealth rather than getting out of a debt trap.  Unfortunately, people start talking about money when it is too late, and end up seeking help only for debt management.

Financial stress in Australia is becoming more acute and more people are worried about their future financial situation, with financial stress leading to other health and social problems.  Sadly, Australian households’ money management skills are not well developed.

To improve a household’s money management skills, couples should be comfortable with talking about money to each other.  When is a good time to start talking about money? Now is a good time to start talking about money.  Take these simple tips for a healthy conversation about money between couples.

Share your goals and dreams.  Couples just beginning to commingle their money need to have a conversation about their goals and dreams, and how to finance these goals and dreams. Couples should also revisit this topic regularly, keeping the discussion calm and non-confrontational. Consider these moments as money dates, or open forums on finances, and remember not to withhold any debts or accounts.  An honest relationship covers all aspects of both individual’s lives.

Make a financial plan.  In making a financial plan, couples should put in writing their priorities and agree on target spending and saving amounts. Make sure that the plan addresses monthly spending, big-ticket purchases, vacations, and long-term savings. Financial planners agree that couples who make achievable and efficient financial plans have significantly lower anxiety levels and have more time and money for long-term romance.

Compromise is part of a healthy relationship.  Quite often, money disagreements derail a good financial plan. Couples can overcome disagreements by learning to compromise. Partners should go into their money dates knowing they need to compromise occasionally.  It’s practical to let the other person be “right” to achieve a higher goal, you can take turns compromising.

Settle Debts.  Credit card and other debts give enough stress to an individual just imagine the financial stress it can add to a relationship. Since couples open their finances during money dates, they should regularly talk about the remaining balance and make it a joint goal to zero it out.  The sooner a couple pays-off a debt, the sooner they can build up their savings.

Set up an urgent fund.  Couples should aim to build up an urgent fund for unexpected events.  The urgent fund should at least be six months’ worth of living expenses. The urgent fund will ease the burden of unexpected expenses like a fender-bender, a lost laptop or an unforeseen medical or dental visit.

Couples should make money dates part of their weekly cycle in order to create savings and achieve their goals and dreams.

Paying off debts should be your primary goal as a would-be retiree. Getting into debt stress during retirement is definitely not a good idea particularly when your only source of income is only a portion of your income when the debt was acquired.

Financial planners and experts recommend would-be retirees to pay off before retiring the biggest possible financial responsibility —  mortgage. There are a lot of reasons for this, not just to avoid debt stress but also to focus on being wise with your money and savings.

For instance, given a scenario of which a single employee aged 49, with a yearly income of  $61,500 and has a remaining mortgage balance of $232,000. For retirement preparation, the employee has $96,000 in super and another $11,000 in a rollover fund. Obviously, the employee’s super is a meager amount enough for daily needs granting the price of commodities will not increase come retirement period. Which then is the better financial move, finish off mortgage first or increase super contributions?

Financial Adviser George Cochrane recommends paying off your mortgage first is a better idea. He explained that retiring in a mortgage-free home should be prioritised to avoid draining your retirement income plus paying off a mortgage before its term will save you a lot of money in interest.

In the scenario mentioned, given that there is approximately 17 years left in  mortgage and assuming the interest rate of the mortgage is at 7.3 percent, a loan balance of $155,000 over nine years is reduced to $130,000 when settled over seven years. That is an instant saving of $25,000 that can be diverted into the retirement fund instead.

Thus, steps to ensure the repayment of your mortgage sooner should be done. Whether you make fortnightly or monthly repayments, you must increase the amount of your repayments. Start with a small but significant amount until you have mastered your new budget allowing a bigger mortgage payment. To maximise savings, it is best to open a mortgage offset savings account. This type of savings account is the most tax-efficient way of handling your money.

Cochrane also advises retirees to assess their living conditions. As retirement comes, tapering of expenses are also in order. The big house that you might be living in may be too big as you retire, or too expensive to maintain on a pensioner’s income. Would you not rather spend on a holiday with your loved ones than use the money to pay for a huge real estate tax or exorbitant utility bills due to your big house? Even if you prepared financially to maintain a big house or more than 2 vehicles, it is simply impractical to do so.

Live simply but have a good life and you shall reap the rewards of all your painstaking efforts to save up for a comfortable retirement.

SuperRatings said compared to the 1.9 percent loss for the median balanced option last year, the median cash option had a 4.3 percent return while the median capital stable option there was only 3 percent return. Due to the debt crisis of Europe last 2011 and the ripple effect the Global Financial Crisis left between 2007 and 2009, the returns are almost normal but cash has been resilient in the past decade.

If a person invested $100,000 in cash a decade ago and never moved it, that person would just be a bit less richer than a person who took a chance in a balanced portfolio. However, if it was the capital stable option they chose, they would have gotten $157,334 versus the $155,963 of a balanced portfolio. This goes against the conventional investment wisdom that returns from cash and fixed-interest investments will be outmaneuvered by long-term returns from growth assets.

According to Kirby Rappell, Research Manager for SuperRatings, there are a couple of ways an investor’s capital can be protected by having more exposure to cash and fixed-interest investments. They can pick a low-risk option from an exiting super fund, or place their money in a life-stage fund, wherein as it ages, automatically adjusts the exposure to growth assets.

In order, Vision Super, HostPlus, Sunsuper, MAP and AustralianSuper were the funds with the best cash options in the past half decade. All had yearly returns of almost 5 percent. Super, HostPlus, First State Super, Cbus and AustralianSuper were the funds with the best capital stable options with returns between 4.2 percent and 5.1 percent.

Costs for actively managed growth options are usually higher than capital stable and cash options. However, due to the multiple variations, it is still advisable to read the product disclaimer statement.

Here is an example. A consistent performer in both categories, HostPlus offers some of the lowest fees. With a capital of $50,000, for the cash option they will charge $102 annually. Broken down, that’s $78 joining fee plus a $25 investment with no administration charges. MAP on the other hand charges $400, the highest amongst the bunch. HostPlus, on a capital of $50,000, charges an annual fee of $308 for the capital stable option.

Not a lot of super members are on the road to cash ‘’safety”. Rappell explained that last year only 3.3 percent of money in public-offer super funds was invested in cash, 3.6 percent in a capital stable option. ”As people get older and have more money in their super fund they start to care more about it,” Rapell said, referring to the pension phase. Almost 11 percent of funds under management were in cash, 40 percent in balanced option, and 15 percent in the capital stable option.

For those who find saving money a bit challenging because of the pile of debt and bills they have to settle each month, setting aside a small amount can be good first step.  After all, every little bit set aside adds up, and sometimes in surprising amounts.

$5 savings plan. Make it a habit that whenever you come across a $5 bill put it aside into a special jar or envelope; then put the amount saved each month into a savings account. Keep adding into the savings account with every $5 note you come across. You will be surprised by the end of the year by how many $5 notes you saved. This can then be used for buying holiday gifts at the end of the year or just extra savings.

$1 a day savings plan.  This is a variation to the $5 savings plan wherein one wants to save for a particular product, event or gift.  In this scheme you set aside $1 a day for a specified period, say for 100 days.  After 100 days you then have $100 which you can spend on that particular product, event or gift.

Rounding-up savings plan. This scheme is where you round up any deposits or transfers to whole dollar amounts, thereby increasing the amount you save.  Alternately, you could apply it to when paying off bills, rounding-up amounts would then lessen the balance and interest on succeeding bills.

Empty pocket change into a jar. This is an age-old savings program to instill the idea that small habits and amounts can really make a difference.

“Biblical proverbs such as ‘The rich rules over the poor and the borrower is slave to the lender’ (Proverbs 22:7) and ‘It’s stupid to guarantee someone else’s loan’ (Proverbs 17:18)… are very much about frugality and financial freedom and about not wasting resources or the planet,” Smark said.  “They may be conservative theories, some may say old fashioned. (However) quite a few Old Testament (lessons) are looking pretty good right now!”

Smark notes that in good times, people see their neighbours who used more risky strategies doing better than they are.  Rather than be envious, remember to take into account the bad times, and the downturn in wealth cycles.

In George S Clason’s The Richest Man in Babylon, first published in 1926, it was suggested that the richest ancient Babylonians lived by the concept of paying yourself first. They put aside 10 percent of their earnings, which they then invested in safe ways and earning through compounding interest.

“The very conservative view of wealth creation will give less returns in good times but better than average results in difficult times,” declares Smark.  “The thing about the historically conservative and low-debt strategies, and setting aside a certain portion of your earnings for those rainy days, is that they work in difficult times of high unemployment and uncertainty.”

During this uncertain time where the worst of the global economic fallout may yet strike, having 10 percent of your income set aside every year puts you in good standing.

Should you still think saving is too tedious, understand that not everyone’s going to stay employed, someone is bound to get sick and something will go wrong when you least expect it. Being frugal is always a safe bet against uncertainties in life.

Stashing away $10 can mean giving up a cup or two of your coffee every week. If you want more, then you can find other small purchases that you can live without and use the money for your savings. Do not belittle small amounts and think that it is too small and would not make a difference whether you spend it or not. It may seem like it isn’t much because saving small amounts on a regular basis can add up to something big in a short period of time.

If you can start with a reasonable amount then do so. However, if you are starting with a humble amount, choose a savings account option wherein you will not be slammed with high fees. This usually hinders the optimal earning of savings accounts containing small amounts. Online savings account is a good option since the interest rates are competitive and its fees are minimal. Set up your account as a plain savings account with its sole purpose is to stash money you have saved or received.

Furthermore, financial advisers will also recommend paying off debt first. It is the best way of saving. Getting rid of debt will save you a lot of money in interests. Although paying off debt may not have the instant feeling of saving, it will actually save you more than putting your money on a regular savings account. In fact, paying off debt is the best savings option for small amounts of cash. For instance, a $100 or $1000 paid off on your mortgage will yield approximately 6 percent tax-free return because that amount is how much you save in interest. However, investments or savings that will give a tax-free return that high are rare to none. Paying off debts can also apply to outstanding balances in your credit card. This option is even better since you can save around 10 to 20 percent on interest, tax-free!

Another brilliant way to save is by making your personal contribution to a super fund. Financial advisers will always encourage you to contribute to a super fund aside from the mandatory contribution that your employer is making. Just because you have the mandatory 9 percent contribution, it does not mean that you are financially secured for the rest of your life. The extra contributions you will make keep the dream of having a comfortable retirement within reach.

This is why the government is pushing to raise the mandatory contribution to 12 percent, to ensure that every super fund member will feel some sort of security knowing that a 12 percent contribution will give you approximately half of your current salary by the time you retire. Again, just like in savings accounts, small contributions may also face deterrents such as high management fees from fund managers. Be sure to choose low-cost funds. However, if you are to invest a little bit more, then you can choose to have a balanced fund wherein your money is invested in various funds such as property, shares and fixed interest.

However way you choose to save, it is always best to assess your options thoroughly. If possible, get the service of a financial adviser to lay down the cards on you before choosing which option is most beneficial for you.

According to financial expert Damian Smith, investors may opt to act fast and lock in higher rates if they are searching for a secure place to stash away their cash. ‘‘I think rates will moderately decline over the next few months,’’ he said. Smith also added that consumers would most likely want to keep their cash for half a year and observe how the markets would fare. The highest rates can be acquired on 6-month and 5-year terms just a bit over 6 percent.

UBank’s 6.11 percent interest rate for $25,000 is the most competitive over the past half year. Investec Bank Australia’s 6 percent rate for a 3-month term is the best. Lifeplan Funds Management’s 5.6 percent rate, if for a year, and Arab Bank Australia’s 6 percent if for 3 years.

Grant Goodier, the Managing Director of The Term Deposit Shop (a term deposit broker) said that though the gap has narrowed, non-banks pay more than big banks. An example he gave was the interest margin on 90-day term deposits between others and major banks which narrowed from 0.8 percent to within 0.36 of a percentage point last August. ‘‘Despite that, you can still get better rates with the non-majors so it still pays to shop around,’’ Goodier said and added that similar contraction across all the different maturities have been observed as well.

‘‘Existing customers of one of the big four with six-figure sums to invest … could almost certainly get a better rate than the one advertised,’’ Smith said. He also explained that big bank customers who can make huge investments and would want to stick to their bank must opt to negotiate for a better rate than the advertised numbers.

The Federal Government’s retail-deposit guarantee protects all term deposits in the tables. Deposits up to $250,000 per person per institution are covered. The best approach for investors with huge sums of money may be to stagger the month across different terms. Placing the deposit into a single term is attempting to time the market, Smith explained.

Savers new to terms deposits should be cautious as soon as the maturity date nears, since institutions automatically roll over the cash into another term deposit using exactly the same term when they do not get word from the investor.

Term deposit is simple. The main objective is to overtake the banks by locking in higher term-deposit rates before it slides again.

The lead-up to the February meeting of the Reserve Bank of Australia (RBA) saw allot of bantering between banks and the Treasurer.  The banks, fearful of another cash rate cut by the RBA, explained their position on their need for more capital funding and challenged the Treasurer to give significant tax breaks on savings accounts, whilst the Treasurer said consumers had every right to be angry if their bank decided to hang on to part of a cut in the official cash rate of 4.25 percent to boost their profits.

As it turned out, the RBA kept the rates at 4.25 percent but the bantering between the two parties was not uneventful.  Posturing on both sides shed more light on how the position of these two sides can affect people’s savings.

Swan pointed out that banks have a much higher return on equity than most of their global peers and accused them of trying “to maintain forever huge profitability”. National Australia Bank (NAB) chairman Michael Chaney warned that if the banks absorbed higher funding costs their profits and returns on equity would be greatly diminished.

“What he’s proposing is very dangerous,” Chaney told The Australian. “A reduction in their profitability would threaten their credit ratings. That would lead to higher borrowing costs, even lower profitability, further credit rating threats and so on, in the downward spiral we’ve seen with foreign banks.”

In the lead-up to the February RBA meeting, banks were hinting that they were unlikely to pass on the full amount of a rate cut because they are facing higher costs on their offshore borrowing, which they say has risen to levels last seen during the global financial crisis (GFC).

Swan retorted that despite the volatility gripping global markets, the banks’ net interest margins were back to levels of before the GFC and urged customers to search for better deals if their existing bank was not looking after them. He said that Labour’s banking reforms had made this easier and had contributed to smaller lenders increasing their share of the home mortgage market over the past 12 months.

However, Chaney pointed out that it was precisely because other international banks had low returns on equity that they could not tap capital to meet prudential requirements, so they were forced to reduce lending, which is felt in Australia now with the withdrawal of foreign lenders.

“We live in a very fragile financial world and our political leaders should be exhorting banks to ensure they maintain their profitability in the face of funding cost pressures,” Chaney said.

HSBC Bank Australia Chairman Graham Bradley said comparing the returns on equity of Australian banks to some of their “impoverished” competitors around the world was not a valid measure.

“What is a valid comparison is a proper risk-adjusted rate of return for the riskiness of Australian banks, which has been quite high because of their dependency on foreign wholesale capital markets. That alone would justify higher returns for investors,” Bradley said.

The mood of Swan’s most recent comments have concerned bank leaders, who believe they are being sent a signal by the Treasurer that he wants the banks to be less profitable.

Suncorp Bank chief executive David Foster, Westpac deputy chairman John Curtis and ANZ chairman John Morschel said tax incentives to encourage deposits would help banks further reduce their reliance on volatile offshore markets.

A spokesman for Swan said deposits were already growing strongly. “Bank deposits now represent a larger proportion of banks’ funding since the start of the GFC, which have reduced banks’ reliance on offshore funding markets,” he said.

About 60 percent of bank funding comes from deposits, which has grown by about 10 percent as banks have competed for deposits, winning consumers looking to pay down debt and find safe havens for their savings.

But Suncorp’s Foster said there was a need for further incentives to encourage savings in deposits.  Foster acknowledged that the government made a step in the right direction but indicated that this was not enough to really make a material difference.

“The thing that is going to drive the ability of banks to sustain customers is the ability to have sustainable and affordable funding,” he said. “It’s the ongoing challenge for the industry.”

The Henry review recommended a 40 percent income discount apply to earnings from deposits and other savings, while the government instead promised a 50 percent tax discount on interest income up to a cap of $1000.  The start date has been deferred to July next year to allow more time for consultation on the plans.

ANZ’s Morschel noted other countries had different treatments for interest earned on bank deposits and that the issue was worth government consideration.  That is if government was indeed concerned about “the cost of living and the cost that the average family and business incurs in terms of interest cost”.

Starting a savings plan requires effort and sacrifice. Here are some rules to live by to help you begin and maintain a life-long savings plan.

Start young. Many who are in their first career job fail to understand the need for a retirement plan. They finally realize when they talk to investment brokers at middle age the wisdom of beginning a long-term investment plan much earlier in life to reap its full benefits.

Retirement planning is never too late because opening an account can have positive effects at any stage of life, but starting at a young age reaps the best benefits.  Start by setting aside at least five percent from each pay check and increase the amount to ten percent after a few raises or promotions.

Start with a small savings plan. If large-scale saving is too difficult at first, start with a “cash cup” in the cupboard. Add to it whenever you find change, make a few dollars on the side, or receive an unexpected cash gift.  Use this for special events like movies, dinning out or gifts for Christmas and birthdays.  It’s a good way to get you into the habit of saving.

Have a Short-term savings plan by using a traditional bank or credit union savings account. For the best rate of interest on the short-term account ask about Certificate of Deposit (CD) with your banker or investment officer. The interest rate is higher than that of a traditional account but the money remains accessible if a need arises.

Diversify to a Long-term savings plan when ready and visit an investment brokerage services to explore possibilities for investing your money in stock market holdings, treasury or savings bonds, foreign exchanges, and even commodities. Take time to analyse options before asking someone else to manage your hard-earned money for you.

Know how money works. Stories of people getting ripped off financially by those they trusted is all too common. Take a non-credit money management course at a local community college, or register for a seminar by a trusted expert.

Set up a direct deposit account. Most employers offer this option, take advantage of it by having your pay check, or the savings percentage, directly deposited into a savings account each month. You’ll never miss it because you never see it, but the deposits continue without interference and compounding interest each time another deposit is made.

Build a dream around your savings. Tangible goals help people focus on the bright aspects of personal sacrifice, making the effort seem worthwhile. You could even name particular savings account for your dreams, like a “Safari Account” for a couple setting their sights on a trip to South Africa for their tenth wedding anniversary.

Have occasional rewards with your income. As you maintain a savings plan, set a little amount for merry spending too, whether it’s a few bucks at the dollar store or a new shirt. Little rewards make saving more fun.

Add windfalls to your savings pool. Annual raises, bonuses, or gift monies are not part of your regular income so don’t budget these into your monthly expenses. It is better to earmark new income for future spending.

Shop around for the best.  Who says you can’t shop while saving? Shop around for the best savings packages and interest rates available. Many banks and financial institutions offer competitive rates because they want your money.

Expand the savings plan. Ask financial planners for help in creating funds for specific projects like a college plan for the kids.

Saving money can be fun and rewarding if you stick by the rules.

Having enough money for your retirement may not only give you access to life’s pleasurable luxuries; it can also free you from the drudgery of a regular job and the stress that comes from financial worries.

But then, just paying minimum compulsory super contributions is not enough to ensure a worry-less future. Terrible investment returns during the past few years, financial crisis here and there and only having the benefit of compulsory super contributions as part of your working life means that you are indeed, in a tight spot.

According to Pauline Vamos, chief executive officer of the Association of Superannuation Funds of Australia, “Most people spend more time planning their next holiday than they do their retirement. The message for anyone worried about their retirement savings is to plan ahead. Many people, especially those on higher income, would want to save more as the definition of a ‘comfortable’ retirement does not allow for too many of life’s luxuries.”

Ways on how you can give your super a boost:

1. Salary sacrifice

   This is the most powerful way to accelerate your retirement savings. It happens when contributions are made from pre-tax pay. For example you have a marginal income-tax rate of 30 percent, for each dollar of pre-tax pay sacrificed, 85 cents goes into super. This is because of the 15 percent tax on contributions. The benefits of tax savings are even greater for those who have higher marginal income. Remember that the first step is to do a budget so that you will know how much you can realistically salary sacrifice into super.

2. Asset allocation

   After deciding on a budget and how much to set aside for your super comes a more difficult decision as to where to invest your money. There are a dozen investment options that comes along with super funds. Options include single asset class which is often termed to as Australian shares or fixed interests, and three or four diversified other options that spread money across several asset classes. Balanced or default options is where most people have their money. Just keep in mind that not all balanced funds are the same; you really need to find some time to study what is in it. In the process of selecting the best investment option, there is a need to consider the amount you need to save and the amount that you can risk.

3. Benefits of financial control

   Self-managed superannuation funds (SMSFs) should only be started by individuals who are prepared to put in time, effort and money required to run a fund. Investors who are also thinking of starting their own fund need to ask themselves what they may be giving up for such. Trish Power, founder of the consumer website, superguide.com.au says, “The majority of people get a better deal with insurance through a large fund.”

The officials at Foreseechange explained that more people, especially the younger ones, have realised the importance of having a substantial amount of money in order to get into the property market. Although there are mortgage lenders requiring minimal equity coupled with the government’s First Home Owner Grant (FHOG), Aussies still feel the need to come up with their own savings in order to purchase the home they want.

The latest World Cost of Living Survey indicated that Australian cities like Melbourne and Sydney are amongst the most expensive places to live in. This emphasizes the need for future home buyers, particularly first home buyers, to come up with a considerable amount for their home equity.

Charlie Nelson, Managing Director of Foreseechange, told the Daily Telegraph that people from Generation Y in mid 2009 were depleting their spare income as much as they were saving. “The big difference is there’s been a realisation that they have to actually save money to afford a house and with current interest rates and house prices they think that’s within reach,” Nelson said.

House prices have increased substantially over the years. For first home buyers intending to purchase a $400,000 home, with a loan requiring 10 percent home equity, they will need to save up at least $40,000 minus the $7,000 government grant. According to the December 2011 House Price Report of the Australia Property Monitor, with the given amount, a home buyer can afford to buy a home comfortably in Hobart and probably in Brisbane and Adelaide too where the median house price is somewhere near $400,000. However, for home buyers in key cities where median house prices are no lower than $538,000 like Sydney ($636,822), Melbourne ($538,448), Canberra ($552,218) and Darwin ($578,702), then they have to save more.

To encourage and assist first home buyers to save for a home deposit, the government has initiated the First Home Savers Account wherein a combination of government contribution and tax incentive is added to the account. The government contributes 17 percent on the first $5,500 of personal savings deposited into the account, but for 2011/2012 the cap in government contribution was already set at $935. However, a FHSA has a minimum holding period of 4 years. So, for first home buyers targeting to purchase a home within 2 to 3 years from the time they started saving, then they could probably opt for a term deposit account or a high interest savings account.

Regardless of their choice of savings method, the importance of saving for a home deposit is emphasized not only to acquire the home of their choice but also to get the best deal that they can afford since most lenders are known to give better rates to borrowers with bigger home equity.

A recent survey has revealed that these young Australians, under the age of 32, have adjusted the way they spend in the past couple of years, more than most of the other generations. General economic instability and the increase in unemployment numbers struck fear into them which explains the switch to behaving conservatively in the economic sense.

The survey done by the 2012 Bankwest Financial Fitness Index reported that more than half of Generation Millennial, also known as Generation Y, are very careful when spending. In the past year alone the “Financially Fit” respondents have doubled.

“Generation Y is the least burdened with long-term debt, such as a mortgage, so they have the most leg room to change their immediate habits,”  said Vittoria Shortt, Chief Executive of Bankwest Retail. “Their fear of rising unemployment is driving their conservative spending behavior, including reduced dependence on credit cards.”

The survey also revealed that one in every four Australians are financially fit when it comes to insurance, regular savings and low housing costs. Another aspect reported was that the top household expenses increasing in the past year all around Australia were food, transportation and energy. A total of 1000 people were surveyed nationwide.

All of this economic instability and conservative spending simply means that Australians are in the best shape financially since the 2008 Global Financial Crisis. The dark side of the story is the more or less equal number of financially unfit Australians. They include those who have no or very little savings and are spending more than they can afford on housing. They are just relying and leaning on debt or loans too much.

The report also disclosed more than 50 percent of Australians are borderline fit financially, meaning moderate in everything – debt, savings, average housing costs and insurance; men are healthier than women financially. Non-Generation Y respondents like retirees stood out, who became the fittest in the last 12 months. People from Generation X, those between the ages of 33 and 46, came out the worst when it comes to managing their finances.

“Consumers are responding to the economic uncertainty by being more careful with their finances, such as using cash or debit cards to make purchases rather than credit”, Shortt added.

It does not have to be the Generation Millennial group who can learn from the Global Financial Crisis, or any other economic crisis for that matter. Every generation can learn something from it. Most of the time, the challenges are very basic and simple. It is really all about managing one’s finances, not overspending and going beyond one’s means. Financial security is the best way to fight any economic downturn. Thus securing a financially fit future should be a goal achieved by everyone.

This is a practical opportunity for those who have changed employers in the past and forgot to transfer or roll over the money in their old fund to their new fund. The biggest lost super that was reunited with its owner amounted to nearly $250,000. The owner did not even know of the existence of his super until he used the SuperSeeker website and keyed in his information.

In the height of news on lost super funds, Chief Executive of AustralianSuper Ian Silk disclosed that his ACT members with discovered lost accounts had an average amount $11,128. This can be a substantial amount by retirement time particularly when it is consolidated into a current fund.

So far, the largest average amounts reclaimed were in the ACT, followed by Tasmania ($8782), Victoria ($7507) and the Northern Territory ($7485); next was Queensland ($7226), then followed by South Australia ($7222), NSW ($6837) and Western Australia ($6614). The latest official data from mid-2010 regarding lost super accounts indicated that there were 5.8 million lost super accounts estimated at a whopping $18.8 billion. However, with the growth rate reported during the time, experts believe it could have boosted to more than $26 billion.

Silk reported that Victorian members of AustralianSuper alone have recovered $16.9 million. However, this is actually just a fraction of all the super accounts that are officially lost in the system and are currently held by the Australian Taxation Office (ATO); others are sitting in dormant super accounts.

Financial Services Minister Bill Shorten highlighted the importance of this problem. He also announced a scheme that will apply to dormant super accounts under $1,000; these accounts will be closed automatically and put them in active accounts. This scheme is expected to close an estimated seven million accounts but this is only a step in reuniting people with their lost superannuation savings.

“It is easy to find your lost super and it is well worth it for the sake of 10 minutes of your time,” Silk said, who also stressed out the benefits of account consolidation and how it improved returns and reduced fees and insurance charges. He is encouraging people to visit ATO’s SuperSeeker, simply input the required information and you will be minutes away from being reunited with your lost super account.

This is very significant information especially for those nearing retirement. Since this group of people has been working for a very long time now, the transfer of super account during a change in employer in the earlier years of employment could have been easily overlooked. Whilst those nearing retirement are to benefit much with the additional money from a lost super account, younger workers will also benefit in the transfer of dormant super to active accounts. This will maximise the earning potential of the account while waiting to be reunited to its owner.

Analysis of 200 accounts for Public Defender shows just one institution has raised its savings rate with HSBC lifting its Serious Saver account rate by 15 basis points to 5.95 percent. One bank even slashed savings rates by as much as 0.15 of a percentage point, while raising its home loan variable rate by the same amount.  So far, 36 institutions have increased variable home loan interest rates.

Consumer groups and finance experts are accusing the banking industry of double standards and are urging customers to switch if they find a better deal.  Finance expert Damian Smith says many Australians don’t have mortgages, and rely on the interest from savings accounts for growth, especially now with the volatility of the stock market.

“This group seems to have missed out on rate rises, and in fact they’ve also seen rates come down in November and December; by 46 basis points on average,” he says.

Even as savers missed out on current rate rises, independent of the RBA, they weren’t spared when mortgage rates went down in November and December. Traditionally, deposit rates follow those for home loans.

“Lenders are trying to widen their margins, so they have deliberately not moved their savings account interest rates,” Smith said.  “Many Australians don’t have mortgages, and rely on the interest from savings accounts.”

Simple Savings founder Fiona Lippey branded the move “arrogant”.

“They really don’t care about the savers,” she said.

Even online savings accounts interests rates have slowed down. The average annual interest of online savings accounts is 4.13 percent, which is about 71 basis points less than six months ago and 121 basis points less than the February 2011 average rate.

However, there are still high-yield cash options available in online banking, as online savings account rates range up to 6.01 percent when certain conditions are met.

“It’s important that people compare online regularly, because not only do rates change, but also bonus conditions can change also,” he says.

Bendigo Bank which recently dropped savings interest said, in a statement released, that interest rates on all products were based on its pricing principles, which aimed to ensure equity for borrowers, depositors, shareholders, staff, partners and the wider community.

Bendigo Bank dropped interest on its Classic account between 0.10 and 0.15 of a percentage point. Thus savers with $30,000 or more stashed away reap just 2.1 percent interest, and just 0.6 per cent on less than $10,000.

Finance experts advise unhappy customers not to get mad, but to get even.  Customers can switch to better deals, especially online where savings accounts pay more than 6 percent per year.

Meanwhile, customers should review the following pointers while shopping for better deals on savings accounts:

• Consider the type of saver you are, and make a list of the features you want.  Some accounts give higher interest rates for savers who can sacrifice flexibility.
• Visit comparison websites to easily compare interest rates on hundreds of accounts.
• Understand the terms and conditions of the savings account and keep an eye on details such as base rate and introductory rates.
• Budget for a savings program you can afford in order to reach realistic goals.
• Keep yourself updated on interest rate fluctuations and new promotional deals.

The base rate is presently at 5.41 percent. However, for account holders who will set up an automatic savings plan wherein they will deposit $200 monthly, UBank’s USaver gives 6.01 percent. Other banks that offer competitive rates are ANZ, Virgin Money, HSBC, ING Direct and RaboDirect. However, all their introductory rates will revert back to the banks’ regular rates which savers should take into consideration before opening an account; the average introductory period is 4 months.

Having an existing account with the bank in order to open an online account and a minimum account balance have to be met in order for an account holder to avail of the bonus rate are just a few conditions that customers should review.

Alex Twigg, General Manager of UBank, highlighted the convenience of opening an online account; it will take approximately 10 minutes of the saver’s time. “They can have an account number and passed their 100-point check without providing any documentation,” said Twigg. He also stressed that this type of account is not open only to the technology-savvy generation but to the elderly as well having a variety of customers age 18 to 108.

High interest savings accounts are calculated daily and paid out monthly unlike term deposits. The interest rates passed on to savings and term deposit account holders by banks and credit unions are regulated by the Reserve Bank’s official cash rate but is also affected by the aggressive competition between providers and their outlook of the cash rate. Online accounts attract a lot of customers because it boasts of easy access to accounts 24 hours a day 7 days a week, anywhere they might be. Online accounts also offer convenient account management online with the facility that allows transfer of funds anytime.

The stiff competition between banks and credit unions has brought them to offer special services and freebies to set them apart from their competitor. While others will offer no fees and charges, competitors will say these are easy to get rid of since online accounts require no manpower or branch to facilitate. In effect, banks and credit unions simply pass on their savings to their account holders.

Although online accounts are easy to open, account holders should be realistic in their reason for opening such accounts – their savings goal. Every account holder should have one. Maximising the earning potential of money in a savings account will require due diligence on the part of the account holder especially for online savings account where most introductory period lasts only for 4 months. So, account holders should try their best to deposit as much as they can to take advantage of this feature.

Most banks and credit unions also allow opening of multiple accounts to allow customers to have an account for a specific saving goal to aid them in managing their finances. This is particularly helpful for people who easily lose track of their spending. This way, the savings an account holder may be reserving for down payment on a car will not be mixed up in their savings for another purpose.

Features

• 1.02% introductory variable interest rate: You will earn 6.02% on your savings for the first four months when you open a new Saver account with RAMS. After the introductory period you will earn a high ongoing variable rate of interest currently at 5.00% p.a.
• There is $0 minimum balance requirement.
• There are $0 monthly fees associated with operating this account.
• Easy 24/7 access to your funds via the My RAMS online banking system.
• An Australian customer service team on hand to answer any question.

How it works

RAMS make it easy to grow your savings. Once your application is successful it’s easy to deposit funds into your account. You can transfer fund between you RAMS Saver Account and your RAMS everyday transaction account through the myRAMS online banking service free of charge. You can transfer funds to any account in Australia using the Pay Anyone feature through your myRAMS online banking service.

You can arrange for a deposit of funds into your account by setting up an automatic debit agreement on any regular specified date and all the transaction information about your previous debts and credits is available for you to review though the myRAMS transaction history. These features are there to grow your money and to help you keep and eye on your transactions so you can watch where every dollar has gone.

Who can apply.

The RAMS Saver account is available to existing RAMS customers who meet the following criteria.

• You must be an individual
• you must be a current RAMS Home Loan Borrower
• you must be an Australian resident.
• you must be over the age of 18.
• you must have a valid email address and mobile number.

You will need the following essential  information for your application.

• An Australian residential address and an Australian mobile number.
• You will need your Tax File Number or your exemption code. The exemption code is optional but if you choose not to provide it, RAMS are required to deduct withholding tax at the highest marginal rate in addition to the Medicare Levy, so best provide it.

For non RAMS customers, you can get in touch with them and let them know you’re interested to get the ball rolling.

Pros

• A high introductory rate of interest that reverts to a high ongoing rate of interest.
• No fuss money management.

Cons

• It’s only available to current RAMS Home Loan customers.

This is good for.

Normally, savings accounts that offer a high rate of interest have strings attached with the restrictions on how much money you can have in the account or minimum montly deposit conditions. the RAMS Save is good for someone who wants a high rate of interest but no fuss in the way they can manage their funds.

How it works

In order to access the funds in your Maxi Saver account, you will need to have an eligible working BankSA transaction account attached. You can use this account to deposit and withdraw funds when necessary.

Features

BankSA offer a competitive interest rate that gets you a return on every dollar deposited into your savings account.

• Rates

You will earn a competitive 4.85% on balances up to 5 million and the same rate of interest on the portion of the balance over that amount.

• Grow your bank account

Make the most of your savings with an automated savings plan whereby funds are electronically transferred from your transaction account to your savings account automatically on a nominated date when ever you decide. This way the money in your savings account and earning interest before you get an opportunity to spend it.

Of course, if you need to access you savings, BSA offers easy access to your savings account in branch or anywhere in the world 24/7 via Internet and telephone banking. There is no charge for accessing you funds but there will be a  3% foreign currency conversion fee if you withdraw funds in the form of a foreign currency.

Closer to home, you will receive no ATM transaction fee for withdrawing from a St.George, Westpac or Bank of Melbourne partnered ATM.

• How to apply

Just log on or pick up the phone to apply for the Bank of South Australia Maxi Saver. The online application will only take 10 minutes.

Just be sure you have all the necessary information on hand to make the application process run smoothly.

• Information needed for application

To apply for a Maxi Saver account you will need to confirm your identification. This includes a either a passport, drivers licence, proof of age card or travel document of identity. If you have identification which doesn’t carry a photo you will need to provide more than one form.

If done right, making money fast can be a thrill ride. One way of achieving that is through shares. Doing it right is emphasized because if it isn’t, instead of making lots of money, investors could easily lose a lot. Shares are proof that a person owns a part of a publicly-listed company. It is not just a financial product. If a prospective investor wants to build wealth on a long term period and not become a short-term trader, buying companies to want to own is the key.

Diversity has a lot of advantages. Investors can maximise their money’s earnings through shares, savings and term deposits. Holding on to only one kind of asset is not the best idea around, especially when it is for a long period of time. It does not mean it is not a good investment, it simply means it can be better with other options and possibilities being utilized. Having a good mix of business opportunities, risky or sure winners, can be a sensible move.

For the long term wealth-building individuals, the ultimate goal is becoming the owner of huge companies, known for paying great dividends. Bank and cash deposits average a maximum of 6% in return of shares but people who purchase and hold these assets get no chance of capital gains in these cases. Unlike owners of great companies, whose shares return a maximum of 12% over a 10 to 20-year period, half of which come from dividends.

Buying 20 great dividend-paying companies is highly recommended if one wants to make a really good portfolio of shares. What this means is that one will get a 5% exposure to one of the companies for as long as the money is evenly allocated. One good way of getting exposure to capital gain and dividends is to buy an Exchange Traded Fund (ETF) for the S&P/ASX 200. A portfolio that is heavily skewed to great dividend payers is a good portfolio. The share prices will not grow as fast compared to others that have been crushed over the past couple of years, so as the stock market heals when the European troubles start to ease, but it will still surface with the rising tide.

As soon as an investor has great dividend-paying companies established, returning a maximum of 12% a year over a decade, then the money grows twice as much every 6 to 7 years moving forward. History shows that good shares will always deliver, even though there are bad years somewhere in between.

However, for those who want to play it safe for some reason, they can always opt to put it in a savings account or a term deposit account. Consumers can choose between the two option depending on the purpose, amount and need for the cash. For instance, a consumer with a bit of cash set aside as emergency fund is best put in a savings account where the money can earn minimal interest and be accessible any time a need may arise, whilst cash windfall like a tax refund or bonus is better placed in a term deposit account where the interest is higher and the temptation of spending the money bit by bit is avoided by locking it away for an agreed period of time.

Hence, whatever amount that is to be saved or invested, there is always a product where money’s earning potential is maximised.

Online banking has made it easier for many people to make transactions in the comfort of their homes.  One no longer needs to go to the bank to do business; in fact one no longer needs to wait for banking hours to make a transaction.

In an age where information travels in the speed of click or double click, banks have embraced our need for speed and convenience.  Online banking is no longer limited to bills payment; online banking is bringing the banks and all their products at our finger tips.

Savvy savers are now flocking the web for the best interest rates offered by banks through online savings account.  One no longer needs to visit a bank to get high interest rates on savings, they can get it online. Even term deposits are offered online at much better rates than what a physical bank can offer.  With the click of a mouse and no paperwork, customers can set up an online savings account.

One of the popular accounts on offer is UBank’s USaver which offers a maximum interest rate of 6.11 percent interest rate, with easy to meet conditions attached.  To get this rate, customers need to set up an automatic savings plan of $200 a month which will give the account holder an extra 0.5 percent interest on top of the 5.61 standard variable rate offered.

For savvy savers, the USaver is an incredible savings program that rewards you as you save more money.

Although online savings accounts can have conditions or introductory interest rates that should be understood before signing up, serious savers know that online savings accounts are the best way to park cash in the short-to-medium term and earn good interest. UBank, ING, RaboDirect and Virgin Money are among the financial institutions offering good rates to customers.

How can online savings accounts offer much better rates than your bank down the street?  UBank’s general manager Alex Twigg says the low-cost operating model of online savings banks allows for higher rates.

“The development of online, broadband and mobile means that people are using the cracks in their day to make the most of their money. Within 10 minutes they can have a savings account opened up, they can have an account number and passed their 100-point check without providing any documentation,” Twigg says.

Twigg says despite it all being online; it doesn’t leave out the elderly, “with customers ranging in age from 18 to 108.”  Proof that when it comes to good money coupled with convenience, Aussies will learn anything to get a piece of the action.

Aussies are taking advantage of online savings account in every way they can.  Primary school teacher Rachel Borthwick, 25, and partner Gareth Freeman, 35, opened up a high-interest online savings account to help save for a house deposit.

“We originally opened a First Home Saver Account but after a year of putting money into that account, we realised it was restrictive,” she says.  “So I did a bit of research online. I wanted to find an account with the highest-earning interest and easy access to funds.  We opened last October and the plan is this time next year to have about $40,000 to put down a 5 percent deposit and pay for stamp duty on a two-bedroom apartment.”

The ideal conditions of a super fund should be something that is well-performing, reasonably priced and offers flexibility, variety and good service. Discovering a fund that offers all these is quite tricky, so, getting the assistance of a fund manager may be a good idea.

There are several types of super funds in Australia but two of the more popular ones are retail super funds and industry super funds. Most of Australia’s super funds belong to either one. Banks and insurance companies usually own and operate retail super funds whilst industry super funds are similar to cooperative where the employer and employee group creates super funds to provide super fund arrangements for a group of workers in a certain industry or state.

Although retail super funds offer a wider range of investments, its overall costs for managing such funds are also higher and it is mostly offered through financial adviser networks. On the other hand, most industry funds offer basic products and are generally low in cost. It is also offered publicly which allows anyone to easily become a member. Another advantage of industry funds is that it is not for profit which means any earnings it gets are put back in the fund for its members’ benefit.

In comparing super funds, make sure to review the fund’s Product Disclosure Statement (PDS) before deeming one to be less costly than the other. A PDS should have a breakdown of all the fund’s fees and charges. For instance, are there entry or exit fees, or charges for getting the services of their adviser? It is also important to know if there are any charges if you switch investment options. This is particularly important to avoid getting stuck to a super that is not working for you.

Choose a super fund with suitable selection of options. Remember that even though retail funds offer over a hundred investment options, sometimes fewer choices are better. The half dozen or so options of the basic industry fund are less complicated and may as well be easier to manage. Also, review the fund’s other services and advantages such as pension products, investment insurance and free financial planning services. Assess a fund’s long term performance since this will give you a clear picture of your investment portfolio in the long run.

After careful consideration between retail funds and industry funds and you feel uncomfortable with both, you can review what self-managed super funds (SMSF) has to offer. As the name implies, this type of fund lets you manage your own investment portfolio. An accountant or a financial adviser can be hired to assist you in certain aspects of managing your SMSF but the fundamental responsibility of managing it still depends on you. Take note that the cost of maintaining a SMSF can be higher than industry and retail funds and in order to make it profitable, a considerable balance is needed – at least $250,000. That is quite a hefty sum but if you have the money and can spend time managing your investments then this type of super might work for you. Nevertheless, with all these options laid out, you can already assess which type of fund will suit you best.

The fact is the earlier a savings plan is started; the less one needs to contribute into a savings plan.  A longer time frame for investment also allows Parents to take on more risk and optimise returns.  This is because fees at most private schools rise each year between 5.5 percent and 7.5 percent, a steep climb compared to inflation which rises about 3 percent a year.

As with all financial plans, parents should have a clear savings target when planning for private education.  Since education investment is a long term plan, external factors should be considered when planning for it says Colin Lewis, the technical services manager at ipac Securities.

“Even if parents start saving when the child is born – with the aim of sending the child to a private secondary school with annual fees of $25,000 a year – parents would need to save about $940 a month for the 18 years from the birth of the child until the child finishes high school,” he says.

“That is $940 in today’s dollars and the monthly contribution would have to be increased by the expected inflation rate of 3 percent each year. That assumes an investment return of 7 percent a year after fees and assumes that school fees will continue to increase at a rate of 6 percent a year. To fund six years of secondary school at $10,000 a year, the monthly contributions would fall to $376.”

Lewis’ calculation also assumes that a tax rate of 30 percent is paid on the investments, a good assumption because it’s likely not far from the top marginal tax rate of most parents.

Lewis suggests families should put 50 percent of the education investment in growth assets such as shares and listed property, with the rest in income-paying assets such as fixed interest and cash.

With growth assets parents should take steps to guard against timing risks by locking in gains and moving some of the money into a lower-risk portfolio.  Also, parents should have another source of capital, such as an emergency bank account, because if the market falls, it is preferable not to withdraw money from a growth-oriented portfolio as the losses will be realised.

Insurance bonds or investment bonds are good tool for education investment.  These are investments for which a tax rate of 30 percent is paid on the earnings.  Optimize the investment by holding onto the bond for at least 10 years. When the capital is drawn, only then will the tax return be entered.  There are, however, restrictions on how much can be invested in the bond each year.

Investors can choose from a range of underlying investment options which spread the money between the various asset classes to cater for the risk appetite of investors.  Insurance bonds are offered by life insurers and friendly societies and are very attractive to grandparents who want to help save for their grandchildren’s education, because bonds do not form part of the estate.

Education savings products offered by banks are also readily available for parents looking for safety in their portfolio.

The oldest provider, the not-for-profit Australian Scholarships Group, uses investment bonds.  Its basic Education Fund helps meet the costs of education in government schools and post-secondary education and training. Its Supplementary Education Program helps meet private primary, secondary and tertiary costs. Its Future Education Program can be started before the child is born, and if the child does not go on to post-secondary study, the parents forgo the earnings on their capital.

The Commonwealth Bank’s Education Savings Plan has four investment options ranging from conservative to aggressive portfolios, which are available through its financial planners, and can be started when the child is any age.

Consider mortgage redraw, it might be the best option.  As long as parents are disciplined, the best return for parents is to save through the mortgage, according to Wayne Leggett of Paramount Wealth Management.

The strategy is to make extra repayments on the mortgage and then to redraw the money to pay the fees. Since most people are on variable mortgage interest rates of 7 percent a year, the money put into the mortgage is earning an effective tax-free return of 7 percent.

Consider that a savings plan or investment would have to earn close to 10 percent to make the same after-tax return as a mortgage.  An investor would have to take on more risk with the capital to earn 10 percent a year.

“The mortgage strategy is a perfectly sound strategy and has a lot of advantages,” says John Hewison of Hewison Private Wealth.

The money earmarked for education could then be put into a mortgage offset account, an account that is linked to the mortgage. The money in the offset account reduces the mortgage balance on which the interest is calculated. The money accumulated in the offset account could be withdrawn later to pay school fees.

Matt Walsh of Lifeplan Funds Management says a stand-alone investment for education is more likely to survive for its intended purpose, because there are potential pitfalls with the mortgage strategy, because when parents upgrade their homes, they tend to use all their available cash. Walsh also points to the risk of divorce and division of the financial assets.

When saving for a child’s private education, the bottom line is that parents should know how much they are targeting, have a clear plan and stick to it.

There are basic techniques Aussies can use in their effort to balance their budget, avoid unaffordable borrowing and secure a decent standard of living.

First of all, avoid unnecessary loans. Banks and other lending institutions recently introduced new loan procedures to limit the number of non-serviced loans; however, many households are heavily indebted due to unreasonably applying for credits they cannot afford.

Analyse your income and expenses carefully before applying for a new loan, as well as thoroughly assess all credit services in the market to select a product that features lowest interest rate and other applicable fees.

Experts agree that excessive borrowing is among the biggest reasons that affect negatively modern household budgets. You should never apply for a loan before securing sufficient personal income to cover loan payments for the entire duration of the credit.

This is the first step to avoid entering spiralling financial troubles that can ruin your household budget but also force you into personal bankruptcy.

Second, rethink your family’s entertainment expenses.  Every household has the ability to cut spending on entertainment, holiday trips and outside dining, which can add further funds to any family’s coffers.

By reducing non-essential expenses that include money spent on entertainment, vacations, outside dining as well as various services, households have a chance to see their savings grow.

Families these days pay for plenty of unnecessary services included in their mobile phone or satellite TV subscription plans that can be easily cancelled, resulting in savings worth thousands of dollars annually.

Third, check if your essential expenses can be reduced. Another method to develop a well-balanced household budget is to trim essential expenses.  Although essentials like food, rent, mortgage, utilities, and insurance may look fixed at first glance, these can be reduced by using some basic saving techniques.

For instance, food expenses can be lowered by taking advantage of discount coupons and other discounts offered by almost all retailers. The rent can be re-negotiated to get better terms. In times of high unemployment and financial insecurity, property owners are more willing to accept lower rent payments rather than lose out on a lease.  Mortgages can be restructured too because banks and lenders don’t make cash from idle foreclosed properties.

Fourth, manage your credit card wisely.  Credit cards are very convenient when purchasing goods and services; however, they can also trap you into spiralling indebtedness.  Manage credit card debt by applying a more cautious approach to shopping through credit cards. Set a budget with credit card purchase within a range you can easily pay off when the bill arrives.

Consolidating your credit cards under a single credit card account that bears lowest interest rate and other service fees will further save on credit card expenses. Credit consolidation is relatively easy now that Some credit card issuers offer to transfer your account to a more affordable credit card company for no or small fee, just don’t rack up additional credit card debt when paying off existing debts.

Lastly, plan and budget your finances wisely. Every household should practice financial planning and financial discipline if they wish to enjoy a balanced household budget.

Careful planning of all your income and expenses is the foundation on which to build your strategy on how to increase your savings, through reducing household expenses and increasing overall income. Subsequently, your newly developed balanced household budget will allow you to work out new strategies to increase your savings.

All efforts to develop a well-balanced budget would prove to be non-productive without tight financial discipline.

If an individual is barely making it financially but still saves up on a regular basis, Term Deposits can be a good way to keep that entire savings safe. However, it can get really tricky. Term Deposits can go both ways, it can either help one save better or go through a rough time when in need. Term Deposits offer a much stricter way of controlling one’s finances. In this sense, no matter what the account holder is going through financially, the account cannot be accessed for a certain duration.

The down side to that, of course, is when an urgent matter arises and it is immediately needed, the account holder will have to go through the painstaking process of accessing it. The worst case scenario is that all cash can still be retrieved but not without a price – a cancellation fee. On the other hand, if a consumer is financially well off and just wants to set aside some riches, then investing in term deposits no longer needs to be analyzed. With its higher interest rate, term deposit is certainly advantageous compared to a regular savings account.

Term Deposits have a distinct purpose when it comes to finances and there are a certain set of scenarios when a consumer must consider it. One such scenario is when a consumer gets a lump sum amount of money, whether it is because of a tax return, a bonus, or an inheritance. Everybody knows the feeling is like winning the lottery and for most people, the initial instinct is to spend it all.

Stop and think.

If there are no debts to be settled, the cash windfall can be kept in a Term Deposit. If it is not urgently needed and one can get by without the lump sum, then lock it all away for a longer time frame. This should give the individual enough time to think and decide what to do with it later on. They can add more to the deposit as time elapses.

For the financially-savvy, Term Deposits with the big banks are most likely under the protection of the Australian Government. Even better, a higher interest rate is given for accounts with longer terms or if the period is extended. The bottom line is, being able to sleep like a baby knowing full well their money is safe in the bank and earning at the highest rate possible. Call it Term Deposit but in the end it is still saving.

The perks of having a bit of money tucked away and secured can be very motivating. Not to mention, there is an invigorating feeling of knowing that one’s finances are under control.

Online Savings Accounts (OSA) is one product. Online banking can help save money by not needing to maintain brick-and-mortar branches. An advantage is that a consumer can quickly open an account online. The account can then be linked to an existing account or accounts. Savings are passed on to a consumer in the form of lower fees and higher rates. Sometimes even ATM fees are reimbursed which allows a consumer to use any ATM free of charge. The online option is the least inconvenient option, giving the consumers a choice to easily transfer as soon as a better deal is found. Consumers can start by comparing a number of online savings account. Look for an account that offers the highest rate.

Rewards Transaction Accounts (RTA) is another option. Although they have a couple of drawbacks, they sure can pay really good interest rates for being daily transaction accounts. The first drawback is that they only pay high interest rates for a limited balance, usually between $10,000 to $25,000 per account. Account balances lower than that generally gain a lower rate. Also, since RTAs are offered by credit unions and small community banks, accessibility may be an issue. The way around this is by doing banking transactions online. The last drawback: for an account holder to earn the best interest rates and ATM fee reimbursements, certain requirements must be met every month such as conducting between 10 to 12 debit card transactions, utilizing direct deposit, receiving electronic statements and logging into online banking. This means changing the banking relationship and primary transaction account for most consumers to maximise the their savings.

Significantly, Credit Unions are on the top list of institutions which gives an opportunity for account holders to maximise the earning potential of their money. Credit Unions are known for good Customer Service. They rate higher than banks in total customer satisfaction. Credit Unions charge lesser fees and pay higher interests because they are non-profit institutions. The drawback here is that they have limitations. They have fewer ATMs than huge banks.

There are advantages and disadvantages for every option. The choice may not be in every consumer’s best interest but they must carefully consider different factors. Look for just the right combination of fees, rates, features and services plus convenience when making transactions to find the best bank that will allow you to save and be financially flexible.

The manager for financial advice and education at NGS Super, Andrew Dunkerley, says the severity of the GFC led to a rethink. Now setting aside enough money to fund five to seven years of income payments is viewed as prudent.

Dunkerley notes that severe market drops can take longer than two years to get back to square one.  For example, the Australian share market took almost six years to surpass its September 1987 peak after the October 1987 crash.  The US Dow Jones index, after dropping almost 19 per cent in 1932, didn’t regain its September 1929 peak until November 1954.

Although there’s not much one can do to prepare one’s retirement portfolio for a disaster of this scale, Dunkerley says having five to seven years of income in defensive assets should help Aussies through most downturns.

How much of one’s portfolio should be set aside for defensive assets depends on the nature of investments, how much income is needed to live on, other source of income during retirement, and one’s appetite for risk.

Since growth assets have historically provided better returns, he advises a bigger percentage of the portfolio lean to more defensive assets rather than keeping all savings in cash.  Aussies who already lost money during the global financial crisis should take this strategy strongly. Dunkerley argues that a cash heavy portfolio will take longer to recover the money already lost.

Dunkerley cautions that this is not a set-and-forget strategy. Even though it is a saving strategy for the future, the need to review it regularly and re-balance investments is important to replenish the cash bucket by taking profits from the growth investments. Failing to re-balance regularly can lead to a proportion of money invested in shares increases dramatically during a bull market, and run the risk of losing much more when a correction comes.

“The greatest risk with this strategy is depleting your defensive assets as the market bottoms,” he says. “Your allocation to safe investments may also need changing as you get older, or your income needs change.”

Setting up this strategy is not complicated and can usually be done through a single account-based pension. “The only catch is to choose a product that allows you to select which investment option you’re drawing down your income from; avoid products that require you to draw down a proportion from each investment option,” he says.

Another option Dunkerley suggests is to invest some of one’s savings in annuities that provide a guaranteed income for life or a fixed period. A lifetime annuity has the added advantage of ensuring a person will not run out of money before he/she dies.  The down side is that the investment is locked away in the fund.

Account-based pensions are better, Dunkerley says, because these offer more flexibility.

Cathy McGuane, author of Financial Fitness for Kids, says it is important for parents to have their own finances in check to ensure they are good role models for children in money management.

“A lot of managing money is around your behaviour, whether you’re a compulsive spender or whether you’re a good saver, a lot of that is something that needs to be taught earlier so it becomes a habit,” McGuane says.

McGuane talks from experience. She set up savings accounts for her two sons, Jarrod, 13, and Kai, 10, at an early age and it has helped teach them about saving their dollars.

There are many savings accounts for children on offer by both banks and credit unions.  Parents should shop around and start their children early in managing their financial future.  Banks and credit unions give good incentives for kids to open accounts, knowing that starting children at a young age and keeping them is good for business and the children too.

Suncorp Bank’s kids’ saving account is one that is worth knowing. This kid’s savings account offers unlimited free transactions, has no account-keeping fees and an interest rate of 5.25 percent if $20 a month in combined deposits is made.

Suncorp executive director Craig Fenwick says these accounts have become very popular and their clients are growing rapidly.

“Ours (kids’ savings account) has been growing in terms of account numbers by about 25 percent per annum over the last 12 months,” he says.  ”A lot of people are picking them up and the balance in them is growing at a healthy 15 percent per annum that is based on the average balance.”

Fenwick agrees with McGuane that parents must be role models in teaching their children the basics of managing money in order for the children to be responsible with money when they become adults.

“Start them early and teach them the fundamentals of saving and earning money,” he says.  ”(It’s about) the appreciation not only of the importance of money but also working towards goals and also thinking about giving back too, so also making donations from time to time to a charity.”

Another high-interest account on offer for children is Bankwest’s Kids’ Bonus Saver account. It has a 10 percent interest rate if between $25 and $250 a month is deposited and there are no withdrawals.

McGuane says aside from teaching children to save cash, parents can also teach their children the value of frugality in very practical ways like understanding bills and expenses.

“Our electricity was costing us a lot of money, so I gave my sons an incentive and said to them, ‘If we get our bill below a certain amount, we will pay you a bonus to do it’,” she says.  “They became very conscious about turning off the lights and computers and we got our bill down because we engaged them in the process.”

McGuane also takes her children to the supermarket to experience and learn the value of keeping a budget.

Get your children started on their financial future with weekly pocket money for chores and encourage them to put money in their piggy bank. This will boost their confidence in saving and give them the mindset of being careful with their cash.

According to a report by Canstar, a financial research group, Aussies’ lack of interest in superannuation is putting their retirement money at risk. Factors such as complexity of superannuation guidelines and the far-fetched idea of retirement shun away Aussies into preparing for their retirement fund. However, oversight of retirement can be catastrophic with the current forecast of 75 percent of Australians are to outlive their retirement fund.

The Canstar report also discussed “it’s not really your money” and “it’s the responsibility of your employer” issues, the two most common superannuation myths that Aussies constantly debate about. Joshua Zenas, Financial Analyst at Canstar, stressed that it is rash for Aussies not to take interest in where their super contributions are going.

“Many people don’t partake in their super until they are in their 50s and by then it’s way too late to accumulate the wealth required to maintain their current lifestyle in retirement,” mentioned Zenas. “Depending on the pension isn’t the right attitude either as it’s not a lucrative form of income. If you want a comfortable retirement you need to contribute to your superannuation,” he added.

He also explained that it is wise for super fund members to take advantage of the free advise of super fund managers since they are always available to provide advice within the fund. For those serious about their retirement, Zenas adds, “It’s wise to talk to a financial adviser about your super regularly and at different stages of life as your lifestyle and financial needs change.”

Since most retirees will be counting on their super to use during their retirement years, it is important to prepare a bigger nest egg to ensure comfortable retirement years. Here are great tips on how to beef up a super fund:

It is said that every retiree will need approximately $1 million to live a comfortable lifestyle in retirement. It may seem like a huge amount but for those who want to ensure a comfortable retirement, then this is the figure they have to work on.

Discussions of increasing the mandatory super contribution from 9 percent to 12 percent are continuously on the table. Experts believe that the current 9 percent contribution is not enough to be self-sufficient during retirement. The suggested 12 percent contribution aims for every Aussie to retire on 75 percent of their final wage. Increasing the super contribution not only benefit Aussies’ future but also their present. Contributing more to their super fund lessens their taxable income.

In addition, Aussies can also take advantage of the Government’s co-contribution incentive program. It is open to low and middle-income earners and can turn every $1 of contribution into as much as $2. The amount of incentive that will be received is dependent on the yearly contribution that every qualified Aussie makes. The Government also grants favorable tax treatment for those who liquidate their assets and pay the proceeds into their super.

There are a lot of ways to be smart with super funds. Take note of every way to save and earn money with super funds. Investment management fees higher than 1.5 percent per year or entry fees are unnecessary charges. According to Australian Securities and Investment Commission’s (ASIC) superannuation calculator, based on a salary of $50,000, a small saving in fees of 1 percent can add $100,000 to your super balance over 35 years.

Members can also save on fees by consolidating multiple super accounts. This way, the super account is easier to manage, less fees are charged, and could make a substantial difference in the end balance.

Other steps can be taken to boost super funds and prepare for retirement. It is always wise to seek the advise of a financial advisor or a super fund manager to maximise the earning potential of every super account.