Tuesday, 19 January 2016

31 Ways on How to Save Money on Bank Accounts (Credit Card, Mortgage, Trading, Saving accounts)

How to Save Money on Bank Accounts
  1. Look for the highest interest rate savings accounts.
  2. Online account normally has better rates (higher savings rate or lower mortgage rate).
The difficulty to withdraw from online withdraw is also a plus point. This will help you to spend less.
  1. Look for accounts that have no account fee, no hidden fee, no ATM withdrawal fees.
  2. If you have multiple saving accounts, consolidate your accounts.
  3. If you are earning interest income, do attach your Tax File Number to your account. If you don’t do this, your bank must automatically withheld 46.5% (the highest tax rate plus medicare levy) of your interest income. This withheld amount will be return to you on tax refund, but remember money right now is better than money later.
  4. Attach your high interest rate saving account to  your transaction account. With iSaver Nab, it earns 2.5% pa (you can prolong the bonus rate by calling NAB every three months). And keep your fortnightly allowance there.
  5. Smaller banks (normally online saving accounts) often offers good offers such as $75 referral fees (for referred person and referee). Chase those ;)  You can find out about them through ozbargain.com, catchoftheday.com.au, etc.

How to Save Money On Credit Cards
  1. Re-think about opening a credit card just for  the sake of collecting reward points. Is collecting credit card points really worthwhile?
  2. If you have credit card debt, consolidate into 0% pa account, with no account fees.
  3. Think about the use of a credit card. If for traveling, 28 degrees from GE Finance offers one of the better rate, without any fees.
  4. Just don’t use it, if you can.
  5. You can use credit card to loosen up your cash flow & earn points. But must pay in full every month.

How to Save Money On Mortgage Account  
  1. Look for the lowest rate mortgage accounts. At the current climate - of low cash rates worldwide - take full advantage of switching to the lowest mortgage rate. And pay your mortgage asap.
  2. Park all of your money in your PPOR (Primary Place of Residence) mortgage account. Don't park your money in saving accounts, term deposit, etc - the yield is too low. Plus interest income is taxed.
  3. Online account normally has better rates .
  4. Ask for application fee in the mortgage account to be waived. Look for any other fees.
  5. If your loan application is simple, try not to use a broker.
  6. If you must use a broker, try to apply for loans with multiple friends and request for a bulk discount.
  7. Have a good credit score, this way you can qualify for tougher financial institutions (the bigger banks) which offer better (lower) mortgage rate. If you go for low doc home loan or with smaller lending institutions, you will get higher (worse) mortgage rate.
  8. Use offset account (Park your money, in an offset account, instead of a high interest saving account. Mortgage account charge you around 4% pa on repayment. A high interest saving account gives you around 2.5% (less tax) in interest income. Therefore, it is much better (save money) to park your money in an offset account..).
  9. Pay mortgage weekly.

How to Save Money On Term Deposit Account
  1. Be careful with term deposit about the duration of the deposit (aka the term). Don’t withdraw earlier than the term. You may forefeet your interest and also, you may be penalised for that.
  2. Ask the banks about when the banks calculate the compounding. Because, the more frequent the compounding is, the better it is for your money.
  3. Ask when the banks put the interest income into your account. The earlier it is, the better for you. Even if it is not able to be withdrawn yet (due to the term), but if the interest is put into your account & the saving rate is compounded on the principal + interest, you'll earn more interest income.
  4. If you are parking your money in a term deposit for more than 1 year, your interest rate must be higher than inflation rate at minimum by 1.5% higher than the inflation rate. Check inflation rate at www.rba.gov.au.

How to Save Money On Trading Account  
  1. Stop day trading, but invest for the long term. Day trading - your brokerage fees eat up your profit. And not many people succeed for the long term in day trading.
  2. Check brokerage fees. Look for the one with the lowest brokerage fees.
  3. Buy in bulk, if you have the money, it’s cheaper that way
  4. Chase the free trades. Brokers promote free trades in order to entice new customers. To buy shares (or, stocks), open a new account for free & buy stocks sans (free of) brokerage fees.
  5. Once you have used up free trades, transfer your current holdings (for free) to another brokerage
  6. Check if your online broker is good or not in terms for compliance by visiting sites below.
  • Note: I cannot emphasize even more strongly on the huge importance of this last step. I was looking into opening an account in a large brokerage firm. And when I checked FINRA, I saw that there are notes in the firm’s report that the firm has tried to take money from client’s account (without clients’ agreements) for quite a number of time. I was very lucky that I check FINRA and SEC. I escaped opening an account in that firm - I avoided potential trouble.





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