For example, both BankWest and ING Direct offer transaction accounts that reimburse ATM fees. A more innovative product is Suncorp Bank’s everyday options account, which is an everyday account that can link to multiple savings accounts as well as lock away part of your funds to a term deposit “flexiRate”.

St. George’s latest offering, St George SENSE Savings, is similar in many ways to Suncorp’s with a few different bells and whistles. The ‘SENSE’ account is effectively an amalgam of St. George’s leading savings and transactions accounts with a few clever gimmicks to help things along.

The first innovative add on is that you receive a combined statement for both accounts. SENSE also comes with a range of pretty snazzy and informative graphs that help you track your spending. One of them is a pie chart that breaks down your everyday spending by categories, such as leisure, home expenses, and transport. There’s also a bar graph version that shows these amounts month to month. Plus you get a graph outlining your savings progress in relation to your set target.

There’s also the Sense Rounding Contribution graph -and this is what really sets this product apart. What exactly is a rounding contribution? Well, every time you make a purchase on your debit card, the SENSE account automatically rounds up the transaction to the nearest dollar and takes that balance from your everyday account and puts it into your savings bucket. For example, say I bought a coffee and a croissant on my way in to work that costs me $5.30. If I pay using my SENSE account, $6 gets taken out of my account. $5.30 goes to the barista and the remaining $0.70 goes into my SENSE savings account. The same process also applies to all BPay transactions too. It’s a really nifty way to start saving without putting any effort in.

All the standard perks come too – if you deposit over $2000 a month into the account you don’t pay an annual fee, there’s no minimum balance required, a VISA debit card, and all the convenience of having linked accounts, such as ease of transfers and regular payments. The savings account comes with a reasonable 4.85% rate as well.

So hats off to St. George. They’ve managed to craft a simple, yet intuitive and innovative product that redefines the relationship between the transaction and the savings account. For all those that struggle with saving, or simply having to manage two accounts, this is one option that could make a lot of SENSE.

Find the best savings account rates at mozo.com.au.

Exception fees are fees charged by banks for ‘exceptional’ circumstances. These circumstances include late payment fees on both credit cards and loans, over-limit fees on credit cards, honour fees when overdrawing a bank account, and dishonour fees charged for cheques that bounce. Reserve Bank data shows that banks charged consumers $961 million in exception fees in 2008.

The impact of these fees on your credit card cost can be significant. Say you’re on a ‘low rate’ credit card with an interest rate of 11.99% and running a $3000 balance. A $30 charge for being a couple of days late on a payment effectively makes your interest rate 12.99% in terms of your cost. If you’re late or overdraw a few more times over the course of the year, the additional costs effectively transforms your low rate card into a middle of the range card without any of the perks.

The principal legal argument for the class action is that when a customer breaks a contract with a bank (by making a late payment for example), the bank may only be able to recover a reasonable estimate of the cost. IMF Australia’s contention is that the banks charge fees much higher than what can be termed a ‘reasonable estimation’, given that it actually costs banks “only a few dollars at most” when you make a late payment or overdraw on your account.

There is a foreign precedent, with close to a million Britons unsuccessfully seeking compensation for overdraft charges in 2009, though a new case set to be heard in Glasgow in June could lead to more litigation. The issue also reared its head in America, with the US Federal Reserve recently ruling that creditors must obtain a consumer’s consent before charging fees for transactions that exceed the credit limit.

Here in Australia, the worst offenders for credit card over limit and late payment fees are Citibank and Suncorp, both charging a whopping $40 for each occurrence. Even NAB, who made a great deal of noise when slashing bank account fees this year, still charge $25 for going over your card limit and $30 for a late payment. Westpac and St. George lead the way, charging only $9. However, the case goes back six years, which could still spell trouble for those who have only recently cut fees.

Even though there will most likely not be a resolution for years, if ever, it will be intriguing to see how the banks behave in the light of all this publicity, particularly in a time of record profits. Even if this case is successful, it almost goes without saying that the banks will find other means to maintain their margins, whether through higher regular account fees or interest rates. As a consumer, the best way to deal with this is to shop around. Only when customers start voting with their feet (and their wallets) will banks really address these issues.

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This is a big win for the banking industry. The measure only applies to income earned on bank accounts, savings accounts, term deposits, bonds and annuities. It will have the effect of pulling money into the banks from other investment vehicles — and from out of cookie jars and under mattresses. And it is Mr Swan’s hope – and mine, and I’m sure yours – that this extra leg up for banks will help them gather sufficient deposits to reduce the overall cost of funding their home loan products. Wouldn’t that be nice: better savings returns and cheaper home financing. Only time will tell.

But what’s it mean for you exactly? Well, at an interest rate of 5.85% (the best standard at-call interest rate in the market right now, at UBank), you’ll be able to save up to $17,000 and receive the full rate reduction. If your taxable income is between $35,000 and $80,000 then you’ll only pay an effective tax rate of 15% on interest: that means a saving of up to $150 a year. And of course the savings are even higher if you’re on a higher rate of tax.

But here’s a savings measure you can access right now. If you already have money that’s not getting the best rate in the market, you can make $150 or more by moving it. If your 17 grand is only earning 4.50%, say in an old BankWest TeleNet Saver account, then moving it to a rate of 5.85% makes you $150 — even after paying current tax rates. And you can do better yet with a Term Deposit, where plenty of providers offer well over 6% on your money for terms as short as 6 months.

If you’re not making the most of your savings, don’t wait for 2011. Mozo’s Rate Chasers have been out in the field chasing down the best rates – compare savings account and term deposit rates now.

In terms of Australia’s banking climate, the review looks set to cause a possibly portentous shake-up of the savings account market. Australia is one of the few countries in the developed world to currently tax bank savings at the full rate, a tag which by all reports will be shed soon, with the government preparing to offer significant tax breaks on savings. Whilst the extent of these breaks are as yet unknown, they are unlikely to match the UK model of which where individuals can deposit close to $17,000 (£10,200) tax-free. Dr. Henry is a known admirer of the UK system, yet many in the media are purporting rumours that something similar to the concessions currently in place for superannuation accounts will be announced instead. However, considering the range of options available in terms of size, scope and delivery, there’s no way to be sure till we hear what Wayne Swan has to say himself.

The tax break would also be a huge boost for Australia’s banks as it could generate billions in additional deposits, potentially lowering their funding costs through reducing the reliance on overseas finance. As a result of this, consumers could potentially receive a boost with regards to home loans payments. The banks have been very quick to use high funding costs to justify mortgage rate rises above that of the Reserve Bank‘s cash rate increases. With funding cost pressures alleviated to a significant degree, the government may well turn around and use this savings deposit boost as political leverage aimed at forcing banks to keep mortgage rates down and in turn, voters happy.

Either way, as far as the banking industry is concerned, consumers look to finally be on the receiving end of some good news. Mozo’s Rate Chasers will have a full wrap-up of all the implications for both deposit and lending accounts here on Monday, so be sure to check back to see what all the new changes mean for you.

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Take for instance the ING Direct Orange Everyday account: it costs nothing to get it and you can and will earn $60 for free by simply depositing money into the account, making a purchase with your Visa Debit card, and debiting money from your account ($20 each). On top of this, every time you withdraw $200 or more from an ATM, ING Direct will pay you $0.50.

Perhaps you’re the kind of person that likes credit cards rather than debit cards? Not a problem! Sign up for the HSBC Credit Card and you’ll be credited with $50 when you make your first purchase. Or the Woolworths Everyday Money Card, which gives you a $50 shopping card after you make 3 purchases. If you’re smart about these types of deals then you could be making yourself a tidy little sum for about half an hour’s work of filling in application forms. The banks are obviously hoping you will stay with them, but if you wanted you could simply then pocket the money, pay off the purchases and then cancel the card. However be careful doing this, because if you make lots of applications for credit this will show up on your credit history – and that may make it harder to get credit in the future!

Perhaps a better way of getting something for nothing from a credit card is via rewards points on a card that has no annual fee. If you always pay off your card in full, of course! There’s not many cards out there like this, but they include the American Express Gold Ascent Rewards Card, American Express Blue Sky Credit Card, the Bank of Queensland Blue Visa and the Coles Group Source Mastercard. There are also a few rewards cards that waive the annual fee if you spend more than a certain amount each year, including the Amex cards offered by AMP, HSBC and Suncorp.

If you’re the kind of person that can walk past a $50 note lying in the street then this blog isn’t for you. If not then enjoy your free lunch. I know I did.

(Note: the offers mentioned in the article were valid at the time of writing, but they may not be by the time you read it. And of course, there may be terms and conditions on each offer that we’ve not reproduced here.)

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The bank was pressured both by ongoing complaints and the Reserve Bank’s disclosure that the industry raised almost $1 billion in dishonour and exception fees. While the cause was taken up in defence of underprivileged account holders, small business will also enjoy the fruits of fee free accounts, which come into place this week.

At this stage, none of the other big banks have followed NAB’s move, but it’ll be interesting to see whether more consumer agitation drives changes that also benefit small business. We’ll keep you posted.

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A 1 year rate of 6.8% is an enormous rate, bigger than any 1 year or even 2 year term deposit rate in the market.  Yesterday the best 1 year rate around was an online special from Rural Bank of 6.25%, and the best the Big 4 offered was 5.5%.  You couldn’t get any more than 6.5% even if you locked your money away for 2 years!

It’s true that term deposit rates have been on the rise for a while.  Even before today’s announcement, the average 1 year TD rate was 1% higher than 12 months ago, even though the Reserve Bank rate is still much lower.  But up to now, it’s been the smaller players leading the charge on Term Deposits rates: yesterday’s leading 1 year deposit rates came from Rural Bank, AMP, Bank of Queensland and Bendigo.  That’s primarily because they’ve struggled to fund their lending compared to the Big Banks, and therefore need to attract more deposits.  So the fact that today’s aggressive move has come from Westpac is a real eye-opener.

We’ve been blogging here at Mozo for a while about the emerging savings account rate wars.  Now the conflict is spreading.  The other players will need to sharpen up their own term deposit rates in order to keep money coming in.  This is a great time to be saving!

But we have to wonder, at what cost to loan rates?  Last month, Commbank CEO Ralph Norris was blaming higher term deposit rates as one of the things driving up home loan funding costs, and one of the reasons why he wouldn’t rule out increasing variable home loan rates by more than the RBA increases.  This certainly isn’t going to help homeowners!

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Also of great news to existing account holders, was UBank’s rate assurance last night, declaring that until the end of the year at least, that USaver interest rate will not fall below that of their chief rivals (including introductory promotional rates), directly labelling accounts by ANZ, BankWest, Westpac, ING Direct and Commonwealth Bank as their chief competition (though surprisingly no Raboplus…).

So the time’s never been better to snap up a USaver account, once again a good 0.2% or more above its rivals. Get in quick while the rate assurances are hot I say!

Want to make up your own mind? Compare Savings Accounts on Mozo.com.au

While debit cards are not new (most banks and credit unions have been offering them for years), MasterCard and Visa have recently increased their presence here to compete with EFTPOS. Since it was introduced, EFTPOS has had little competition in Australia, but the boffins at EFTPOS haven’t kept up with the times, and more specifically, the internet, opening the door for the debit card.

It seems the newly refurbished Visa and MasterCard debit cards will soon usurp the throne of EFTPOS to become the new norm. However, debit still faces the competition of the credit card. So who will reign supreme?

Credit Cards:

Pros:

• You have access to money that isn’t yours for impulse purchases before your pay day
• Rewards programs
• Travel insurance (on some cards)
• Accepted almost everywhere as a form of payment

Cons:

• You have access to money that isn’t yours for impulse purchases before your pay day
• Annual, late payment, rewards program and dishonour fees
• Interest payments on outstanding balances
• Cash withdrawals (or ‘cash advances’) incur hefty fees and interest rates

Debit Cards

Pros:

• You’re using your own money so you never have to worry about interest payments
• Accepted almost everywhere as a form of payment (including overseas ATMs)
• You can use it to withdraw money from an ATM or get cash out with purchases

Cons:

• There are fees associated with some debit cards.
• There are no rewards programs
• You could be tempted to spend more money over the internet simply because you now have the access

The verdict:
Credit cards are great if you want rewards more than you mind annual fees, and will pay off your balance before the interest rate kicks in. If this isn’t you, then debit cards are the way to go. Happy spending people!

Compare credit cards at mozo.com.au

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Naturally, we looked around for a catch: a minimum monthly deposit or sneaky disclaimer, but the move came out squeaky clean. NAB’s Classic Banking and eBanking personal transaction accounts are among those to change over on January 22.

NAB will also abolish over-limit fees and dramatically reduce its late payment fees — taking the sting out of financial forgetfulness (and haven’t we all been there).

The announcement comes after NAB upped the ante earlier in the year by ditching its overdrawn fee. Commonwealth Bank was quick to follow suit, but ANZ is dragging its heels and Westpac has gone AWOL on this one.

NAB hopes to make up the lost revenue in new customers, so the rest of the Big Four better check their game-plan. Because pain-free banking sounds like a winner.

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