Choosing a Savings Accounts
Choosing the right savings account or cheque account can be a potential minefield in this day and age. There are now 100s of different lenders offering a huge range of products. Choosing the right account pay huge dividends, choose the wrong account and you can be left with escalating bank charges and unwanted account features Have a quick look at the following 5 tips to stay ahead of the competition.
Step 1 – Assess your needs
THINK about what you want from day to day banking and look for an account that reflects that without incurring additional fees.
Transaction accounts are for depositing your salary and paying bills and shopping (with cheques becoming optional with online bill paying). Savings accounts are for saving up with limited withdrawals and offering a higher interest rate (with top rates from the new online savings accounts).
Do you use your local branch and want unlimited over the counter transactions (these are getting hard to find, with the Commonwealth now charging a general fee for not using an ATM)? Or do you prefer transacting online, with an unlimited direct banking transaction account, plus withdrawals through ATMs?
Step 2 – Weigh up fees
Service and transaction fees are the norm and the trick is to avoid them. Some savings accounts are fee free, some transaction account are free up to a limit (but they can vary charges at any time.
Ask how much the monthly account keeping fee is and check what services you can access. Change your banking behaviour to lower the fees – banks want most routine transactions done through ATMs. Compare bank fees at infochoice.com.au or cannex.com.au.
Step 3 – Ask about waivers
Some banks will waive the monthly account keeping fee if you deposit your salary, package your home loan with a transaction accounts or just do a lot of business with the bank.
Most banks offer fee-free accounts to pensioners, students, children or people living in rural, regional or remote areas may be eligible for discounts. Ask your bank or find out if any other banks offer low-cost options that suit your needs.
Step 4 – Does it meet your needs?
Ask about the level of ATM access available. Most banks charge extra ($1.50) if you use another bank’s machine so make sure they have plenty of their own ATMs.
Do you want a normal ATM/EFTPOS card or Visa debit attached to the account?
Step 5 – Look into add-ons
Does your bank offer competitive online savings accounts, which piggy back on transaction accounts. These accounts generally offer an on call savings facility with high interest rates with low (or no) fees. Just the thing if you have spare cash or want to start saving for a car, a holiday or deposit on a home.
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