How to Save Money with this Interest Rate Rise

Friday November 9, 2007

The interest rate rise is official and we will all have to deal with further rate rises in the near future. For some people this is an expense that really hurts their finances while others can cope without having to suffer any financial discomforts.

What this does do is highlight the need for consumers to really start thinking about what is best for them.

Since the privatization of the banking sector in the 1990s it is now paramount for the banks to make larger and larger profit margins. You, the consumer, are the one responsible for paying for a large portion of that profit through fees and charges.

Many people have credit cards in Australia with the majority carrying a debt of around $3000. Look at transferring your credit card account. Balance transfers offer great savings with some cards offering a zero percent interest rate until you have repaid your outstanding debt.

Some of the basic savings accounts that people use for easy access at automatic teller machines (ATM) pay you .01% interest on balances under $50,000.

Close the account and put your money in an account that earns you a respectable return on your savings while continuing to offering you the same conveniences. Lets not forget that monthly charge of $5 or $6 depending on which financial institution you bank with, there are zero-fee transaction accounts available for people who don't like paying monthly fees for just having a bank account.

Western Australia's BankWest has a Hero Transaction Account offering 5 percent on balances up to $5000 and doesn't charge you a monthly fee. There are some terms that you need to understand with this account. The Hero Transaction Account pays you zero percent on amounts greater than $5000 so if you are looking to have access to a large amount of funds then you will need to look at other products offered by HSBC and Members Equity Bank.

They both have accounts that suit those who like to have access to savings. There are no monthly fees and your savings earn in excess of 5% interest that clearly beats the .01% offered by some of the major Australian banks.

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