Friday, 5 August 2005

Savings

I'm trying to figure out why Westpac's "Max-i Direct personal" savings account is so good. Not that I'm complaining, I just don't understand. Essentially it's a holding place for my money that attracts a high interest rate and has no fees, and the only way to interact with it is to move money to or from it using online banking. That's only a small hassle though; there's no penalty for moving money back and forth as many times as you like.

The thing is, the interest rate is really high! I can't figure out why you'd put your money anywhere else, even a long-term deposit account. Some figures: The interest rate was recently 5.5%, it's just gone down to 5.25%, but it has a guaranteed lower limit of 5.0%
Compare that to the cash management account, which tops out at 4.8% for amounts over $500,000, or term-deposit accounts, which only approach that figure for amounts over $10,000 invested for 2 years!
Interest rates are similar elsewhere, for example ANZ and Commonwealth.

I just can't figure out why even at the same bank you would use anything else, and I can't find anything like this at other banks :S

Disclaimer: No, I am not employed by Westpac :p

4 comments:

Brett said...

Wow! That does seem really strange.

Looking at the other types of accounts, nothing seems to go near it in terms of the interest rate. :-|

My sister is a financial advisor at westpac - ill ask her about it.

Heaps better then what im currently getting at the National, maybe its time to change.

Brett

Brett said...

hrmm, it does say:

2. You cannot pay bills from a Max-i Direct account using BPAY.

But also:

Unlimited Telephone Banking and Internet Banking transactions made between linked Westpac accounts held in the same name.

So really you could have all your cash in this account getting max interest, when a bill comes just transfer the amount needed to pay to another westpac account and pay with Bpay form the other account.

I guess it depends then on how much the fees / etc are for the 'other' account are.

interesting...

Brett - again

melanie said...

saturday, 6 august, 2005 09:40 MAT

my account at suncorp has that scheme. the main account attracts no interest. the subaccounts attract 5.25% interest and i can have up to three different subaccounts. there is no minimum deposit to attract this high interest rate.

monthly payments for my automobile insurance that i carry with suncorp are directly debited each month from one of my subaccounts. wages from kip mcgrath and uni are directly deposited into one of my subaccounts. i can move money between any of the accounts, main or subs, as many times as i like. i can only draw money from the main account at the atm, so if i need cash i either have to transfer money from one of the subaccounts to the main account via internet or phone banking.

all this with no extra fees, just like you. i will have the monthly $4.50 fee when my student classification expires at the end of the year, but that was to be expected. so far it's been a good deal. i like it.

Nick said...

Sounds like Melanie's Suncorp account is slightly more flexible than my Westpac one, but as Brett noted it's not a big deal - I just move the money around myself when I need to.