Interest Rates

[Bill M]

UBANK customers take note, I just received an email from UBANK saying their rates are changing, >DOWN<

It's suppose to be effective from the 7th. of April 2014.

And I thought the bias was up.

USaver with bonus will be 4.01%

USaver with Ultra and bonus will be 4.37%

USaver SMSF with bonus will be 3.76%

I still find it hard to understand why SMSF accounts are penalised against the standard accounts so much. It's just another account, nothing extra to do for them really, anyone know ?

 

[sydboy007]

I still find it hard to understand why SMSF accounts are penalised against the standard accounts so much. It's just another account, nothing extra to do for them really, anyone know ?

Probably partly due to the fact SMSF cash accounts can be quite large and a lot of SMSFs are conservative in their asset allocation so the banks feel they don't need to be so aggressive for the deposits.

I'll stick with AYF for now since they're still offering around the 7% gross yield and the share price has a fairly low volatility.

For those looking for a bit more safety I was looking at the RCB Russell Australian Select Corporate Bond ETF which seems to offering close to 5% which is a reasonable yield in the current financially repressed market. Wish there was a decent international corporate bond ETF available here.

FIIG still have a number of corporate bonds available to retail investors providing over a 6% yield which is pretty good too, especially if you like something a bit safer than the AYF hybrids.

 

[Bill M]

Probably partly due to the fact SMSF cash accounts can be quite large and a lot of SMSFs are conservative in their asset allocation so the banks feel they don't need to be so aggressive for the deposits.

Yes but money is money, it doesn't matter where it comes from, be it SMSF investors or retail investors, all Australian investors.

I'll stick with AYF for now since they're still offering around the 7% gross yield and the share price has a fairly low volatility.

I saw a small batch of these cheap last week when it was ex dividend, topped up at 6.36. Nice little earner this one, cheers.

 

[boofhead]

Probably no coincidence that CBA revised their headline term deposit rates today. I have no idea what they changed from as they don't seem to publish historical information.

 

[sydboy007]

Yes but money is money, it doesn't matter where it comes from, be it SMSF investors or retail investors, all Australian investors.

Well the banks are like the airlines and they do yield management. Can't say I like it, but then they dun get much of my money so no loss to me. My high interest account is used to hit $10K then it's invested.

I saw a small batch of these cheap last week when it was ex dividend, topped up at 6.36. Nice little earner this one, cheers.

Seems we had the same idea. I picked up a 10K parcel last week at 6.36 too. Dun mind the $628 income each year plus around $78 in franking credits which pays for a fair chunk of the income tax in my SMSF. If you haven't had a read of their latest update you should give it a perusal. Some interesting possibilities if interest rates starts to rise - with inflation at 2.7% it may not be too far in the future.

 

[Julia]

UBANK customers take note, I just received an email from UBANK saying their rates are changing, >DOWN<

It's suppose to be effective from the 7th. of April 2014.

And I thought the bias was up.

Bill, Rabodirect sent out a similar advice about ten days ago.

It would seem the banks feel pretty flush with cash at present, perhaps a reflection that the share market still represents a big danger sign to many investors who were burned in the GFC.

I don't know what the reason is for fewer advantages for SMSFs either. In order to meet the requirements of X% of fund value being taken as allocated pension before the end of the year, I'm going to have to move some money back into my own name out of the SF. This will mean I can open a new a/c with Rabodirect at the advertised rate.

All just an irritation and what seems to be unnecessary stuffing about.

 

[tinhat]

UBANK customers take note, I just received an email from UBANK saying their rates are changing, >DOWN<

It's suppose to be effective from the 7th. of April 2014.

And I thought the bias was up.

USaver with bonus will be 4.01%

USaver with Ultra and bonus will be 4.37%

USaver SMSF with bonus will be 3.76%

I still find it hard to understand why SMSF accounts are penalised against the standard accounts so much. It's just another account, nothing extra to do for them really, anyone know ?

It's because they don't need your money. They needed it after the GFC but now they can get cheaper money elsewhere I guess.

 

[sydboy007]

http://www.rabodirect.com.au/notice-saver/

If you're looking for a high rate of interest and don't mind "locking" your money up for 90 days, the RaboDirect Notice Saver 90 might be good for you.

For personal accounts it's offering an ongoing 4.05%. You can deposit money as you wish, but you have to give 90 days notice to make a withdrawal.

Seems to offer a better rate than most TDs, with the added flexibility of being able to top up the account with any surplus cash.

 

[Panaman]

I use AYF in my SMSF as well, thanks to Sydboy posting and bringing it to my attention maybe a little more risk than cash but with nearly twice the yield of Term Deposits, well worth it IMO.

Even got my Daughter some, she has a weekend job and I have got her in the habit of saving some of her wage each week, before long she had $5000 but all she got was 2.5% from her savings account, so we had a chat and I explained there may be a it more risk if she invested but it could also grow considerably, she didn’t want too much risk so we bought AYF and a high dividend ETF IHD, she now gets about a 6% yield and her IHD are $1-50 higher, she is chuffed to pieces

 

[sydboy007]

I use AYF in my SMSF as well, thanks to Sydboy posting and bringing it to my attention maybe a little more risk than cash but with nearly twice the yield of Term Deposits, well worth it IMO.

Even got my Daughter some, she has a weekend job and I have got her in the habit of saving some of her wage each week, before long she had $5000 but all she got was 2.5% from her savings account, so we had a chat and I explained there may be a it more risk if she invested but it could also grow considerably, she didn’t want too much risk so we bought AYF and a high dividend ETF IHD, she now gets about a 6% yield and her IHD are $1-50 higher, she is chuffed to pieces

AYF is definitely hard to resist at 7% grossed up yield.

Just wish there was some decent yield corporate bond funds here. Most are barely pay much better than TDs

 

[Tyler Durden]

I'm looking to move a small amount into a new online savings account as the previous high rate at ME Bank had expired for me. Currently it looks like ING at 4.35% for 4 months, or Bankwest at 4.30% for 6 months.

 

[Bill M]

I'm looking to move a small amount into a new online savings account as the previous high rate at ME Bank had expired for me. Currently it looks like ING at 4.35% for 4 months, or Bankwest at 4.30% for 6 months.

Yeah, not much more available out there. I closed off a Bankwest account about 10 years ago. When my ME Bank high rate expired I tried to open a new Bankwest Account and I was still on file and couldn't get the bonus rate. I've expired all my bonus rates from various banks so now it's UBank with Ultra and I get 4.37% with them as I full fill their requirements.

 

[Julia]

http://www.rabodirect.com.au/notice-saver/

If you're looking for a high rate of interest and don't mind "locking" your money up for 90 days, the RaboDirect Notice Saver 90 might be good for you.

For personal accounts it's offering an ongoing 4.05%. You can deposit money as you wish, but you have to give 90 days notice to make a withdrawal.

Seems to offer a better rate than most TDs, with the added flexibility of being able to top up the account with any surplus cash.

OK, but why would you commit to any sort of term when you can get the same or better at call as other posters have mentioned?

However, what I really like about Rabodirect is that they send you an email when their rates change downward as well as upward, unlike most of the bigger banks who don't apparently find it necessary to remind you when your four month bonus period is up and your interest rate has reverted to around 2%.

 

[ROE]

what the best cash at call rate and where.?

I got some cash I want to put a way for a while but at call only ... I want to access it when Mr Market going into a scary frenzy

 

[Julia]

ROE, full comparisons available at
www.infochoice.com.au

 

[Tyler Durden]

Yeah, not much more available out there. I closed off a Bankwest account about 10 years ago. When my ME Bank high rate expired I tried to open a new Bankwest Account and I was still on file and couldn't get the bonus rate.

Serious? That was one of my concerns and a question I've been wondering about. How exactly is a "new customer" defined? Do different banks define it differently? I recently took up ANZ's $100 offer for new customers, then closed the account after I received it, and now wonder if I would be eligible for any future "new customer" offers from them.

 

[Bill M]

Serious? That was one of my concerns and a question I've been wondering about. How exactly is a "new customer" defined? Do different banks define it differently? I recently took up ANZ's $100 offer for new customers, then closed the account after I received it, and now wonder if I would be eligible for any future "new customer" offers from them.

Yeah, I am serious. As I had a fair bit to put in I thought I better call them first. I called and said, I had an account many years ago and I was was thinking about opening a new account, but on one proviso, that is that I could get the bonus rate. They asked for my name and birth date and I was still on file, then they said no I wouldn't be entitled so I went elsewhere. I don't know if they are all the same. Pretty bad really, it was at least 10 years ago.

 

[Julia]

You can, however, have one 'new' a/c in your SMSF name and another 'new' one in your own name.

Depending on your relationship with your bank, it's also sometimes possible to have the 'new' rate re-applied to an existing a/c.

 

[sydboy007]

OK, but why would you commit to any sort of term when you can get the same or better at call as other posters have mentioned?

However, what I really like about Rabodirect is that they send you an email when their rates change downward as well as upward, unlike most of the bigger banks who don't apparently find it necessary to remind you when your four month bonus period is up and your interest rate has reverted to around 2%.

It's the best ongoing rate around.

Good for someone who wants to be on the best standard interest rate without having to move their money every 4 months.

I think it's also close to being the highest interest rate available for an SMSF since it's available for business accounts

 

[Julia]

It's the best ongoing rate around.

It's as variable as any of the other rates, syd. When they introduced it, all three levels were higher than they are now.
Sure, if you commit for the 90 days, that rate will apply for that time. But you have no guarantee that you can renew at the same rate.