the mozo blog

With high competition for customers on both the lending and savings/deposit fronts, it is often the everyday transaction account that gets forgotten by many providers and consumers. Viewed by many as a simple vanilla account, many Australians are oblivious to the fact that there are some great, innovative products out there, all geared to help them save money.

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.

ING Direct has just taken the wraps off its new “Orange Everyday” account.  ING Direct have been hinting for a while now that this transaction account would refund fees charged by ATMs when you withdraw your money.  Now the full details have been announced, and the bad news is that the much-anticipated ATM fee refund only applies if you withdraw $200 or more.  According to the latest RBA statistics, the average ATM withdrawal is about $180.  So in looking for the best transaction account, you really need to consider whether the way you use your account matches the conditions each bank has attached to their offering.  Are you happy to jump through their hoop?

If you always take out $200 cash or more, ING’s Orange Everyday account certainly is worth considering:

• ATM fee rebated from any ATM in Australia if you withdraw $200 or more.
• EFTPOS is free, and ING pays you 50c if you withdraw $200 or more as cash out via EFTPOS.  Yes, that’s right: they pay you to take cash out.
• $20 bonus paid on each of your first salary deposit, direct debit and Visa Debit purchase, if you do them before 2 November.
• Interest: none, but you can link to their savings account.

If you always deposit your salary to your transaction account, the BankWest Zero Transaction account may suit:

• ATM fee rebated from any Big 4 (or BankWest) ATM, regardless of the amount.
• EFTPOS is free.
• You must deposit $2000 a month or they’ll transfer you to a different account.
• Interest: none, but you can link to their savings account.

If you keep a few grand in your transaction account, or can’t be bothered transferring to and from a separate savings account, then you might prefer an account that pays some interest rather than worrying about the fees.  For example, the AMP First account pays 4.35% interest, charges $5 a month, and cash is free at nab ATMs, RediATMs and EFTPOS.

And of course if you’d just rather stick with using one bank’s own ATM, most offer an account with no transaction fees for about $4 a month.  Some of these pay a little interest, and some even waive the account fee in certain circumstances.

The move by ING Direct could encourage the major banks to look for new ways to offer fee-free banking, particularly if Brett Morgan, ING Direct’s Executive Director of savings gets his way. “We want to become the Australian consumer’s main bank, their favourite bank; they may bring their whole banking relationship to us”.  It will be interesting to see how many people are happy to do things the ING way.  And it will be interesting to see what other products come out in response, and what sort of conditions are attached.

Compare bank accounts with Mozo.com.au