Banking 101

Easter holiday is round the corner and it's the best opportunity to switch banks to make your money work for you! After reading YH's blog, it has inspired me to write up this post about banking 101. I've been studying finance for the whole night about interest rates, share prices, etc however it has nothing to do with what I'm going to write about. Although this is not the 'Golden Time' yet to be pouring in money from your parents to be locked up in saving or term deposits, but there are still banks out there offering interest higher than the official cash rate set by the RBA. Enough with the jargon, I will get down to the basics and facts to expose which banks are offering the best rates and what accounts you need to maximize interest revenue. However, term deposits will not be taken into consideration.

NOTE: I will not be responsible for any financial crisis or problems after you have read this post.

Most of you might think, pfft, I have not enough savings to be making good interest, but bear in mind, a little comes along way.

Let's compare the interest rates offer by Australia's big 4 banks and THE bank to deposit your money.

BANKWEST	INTEREST%	COMMENTS
Student Account	0.00%	No fees in general.#
Instant Saver	1.00%	Must have minimum $500 or bank fees will be charged. Withdrawal has no penalty on interest.#
Regular Saver	6.00%	Minimum $50, Max$ 500 deposit a month. No deposit = No interest for month. Must be linked to eligible accounts. No fees. Withdrawal results in interest forfeited.
Telenet Saver	4.25%*	Must be linked to student or eligible accounts. No fees. Withdrawal has no penalty on interest.
Smart eSaver	3.25%^ or 5.00%	Must be linked to student or eligible accounts. No withdrawal interest is 5%, withdrawal interest is 3.25%^. No Fees.
		*Introductory interest, however seems is staying there for quite some time.
	#Check website for details. www.bankwest.com.au	^Variable with RBA cash rate.

Remarks: Though it seems like there are many accounts you need to open. However this is by far the best bank to deposit your money in. The student account would link up to both Telenet saver and Smart eSaver. This way you have the liquidity of your funds in case of an emergency and yet still making interest while it sits. The Regular Saver earns the highest interest and as stated above, you need to deposit a minimum of $50 a month to make 6.00%. Fret not, at the end of every year your money will be transferred to your Instant Saver or eligible linked account where you can withdraw and spend it, or re-invest. The only down side is that you can only deposit $500 dollars maximum. I would not recommend depositing more than $500 into your Instant Saver as it is just needed for the Regular Saver account, however, I'm not sure if the terms and conditions have changed as the Instant Saver was needed to open the Regular Saver account before.
Moreover, the Smart eSaver interest is higher than any current short term deposits and you're not locked down to those terms.

COMMONWEALTH BANK	INTEREST%	COMMENTS
Streamline	0.20%	No fees in general.#
NetBank Saver	3.00% or 4.50%~	No fees, must be linked to eligible accounts. Withdrawal has no penalty on interest. ~Valid until 30/06/2009
Youthsaver	3.00%	No fees, must be linked to eligible accounts Withdrawal has no penalty on interest.
		#Check website for details. www.commbank.com.au

Remarks: Self-explanatory. The Streamline account is for your everyday banking needs. I would suggest depositing your bulk of your money into the Netbank Saver or Youthsaver. And only leave sufficient amounts for your daily needs. Afterall, you can always go home or to the nearest cyber cafe or computer lab to transfer. However, nothing fancy about commonwealth.

WESTPAC	INTEREST%	COMMENTS
Basic Account	0.00%	No fees.
Westpac eSAver	3.00% or 4.55%~	No fees. ~Valid for 4 months when account is open between 11 March and 9 April 2009. Withdrawal has no penalty on interest.
Westpac Reward Saver	0.50% or 2.90%~	$2.50 per withdrawal. No other fees. ~Bonus interest given when minimum $50 is deposited a month. #
		# Check website for details. www.westpac.com.au

Remarks: Self-explanatory. The Basic Account is for your everyday banking needs, they do offer you a debit master card. I would suggest depositing your bulk of your money into the Westpac eSaver. And only leave sufficient amounts for your daily needs. Afterall, you can always go home or to the nearest cyber cafe or computer lab to transfer. Don't even bother considering Westpace Reward Saver account, as it is totally hopeless in my opinion.

NAB	INTEREST%	COMMENTS
Student Account	0.00%	No fees in general. #
NAB iSaver	3.00% or 4.55%~	No fees. ~ Valid for 4 months wehn account is open before 08 May 2009. Withdrawal has no penalty on interest.
		# Check website for details. www.nab.com.au

Remarks: Self-explanatory. The Student Account is for your everyday banking needs, they provide you with a debit visa card so you can do some online shopping. I would suggest depositing your bulk of your money into the NAB iSaver. And only leave sufficient amounts for your daily needs. Afterall, you can always go home or to the nearest cyber cafe or computer lab to transfer.

ANZ	INTEREST%	COMMENTS
ANZ Access Advantage	0.00% - 0.02%~	~Tiered interest: $1-$49,999 0.00%, etc. $5 account keeping fee, student waived. Unlimited withdrawals at ANZ atms. #
ANZ Progress Saver	2.41%	No fees in general. Deposit $10 minimum for 2.41% Interest, or 0.01% interest if no deposit. #
ANZ Online Saver	4.00%	No fees.#
Other ANZ Access Accounts^	0.00%	^Account keeping fees may apply, and students fees waived for most.#
		#Check website for details. www.anz.com.au

Remarks: Self-explanatory. The only good account here I can find on the ANZ website is the ANZ Online Saver because it gives 4.00% interest, it beats Commonwealth, Westpac and NAB online savings account. However, I'm not too sure if they charge you for transfering online to another bank's account. Other than that, ANZ Progress Saver is rubbish. The ANZ Access Accounts are nothing to be jumping about for.

Conclusion: Bankwest wins hands down, though I have yet to research smaller banks like St. George etc. However, it's always good to diversify your funds in at least two banks. I currently hold HSBC and Bankwest bank accounts so I have more options when I need to withdraw money. Current Bankwest account holders can withdraw from Bankwest ATM's in all 7-11 stores and Commonwealth ATMs. Just think about the couple of extra dollars could save up to buy yourself a bus or train ticket so you don't have to be a fare evader. Yes I know, I'm a biased towards other Banks, but you can't blame me. Bankwest is currently the best.