Speaker 1: Hello.
Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud Yr the
Speaker 2: Order Kerney Whalbury and a waddery woman. And before we
Speaker 2: get started on She's on the Money podcast, I would
Speaker 2: like to acknowledge the traditional custodians of the land of
Speaker 2: which this podcast is recorded on a wondery country, acknowledging
Speaker 2: the elders, the ancestors and the next generation coming through
Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and
Speaker 2: the storytelling of you to make a difference for today
Speaker 2: and lasting impact for tomorrow.
Speaker 1: Let's get into it.
Speaker 3: She's on the Money, She's on the Money.
Speaker 4: Hello, and welcome to She's on the Money, the podcast
Speaker 4: for people who want financial freedom. My name is beck
Speaker 4: Syed and Victoria de Vine. Do you know what I
Speaker 4: love most about end of year?
Speaker 1: The parties?
Speaker 4: That is, that's probably top of the list. But speaking
Speaker 4: of list, it doesn't.
Speaker 1: Work for the content that you're trying to create here, fortunately,
Speaker 1: I'm so sorry. Wow, what do you look forward to most?
Speaker 4: Perfect? If we could be a little bit more robotic
Speaker 4: next time?
Speaker 1: I thought it was very organic.
Speaker 4: No, that was perfect. That was perfect.
Speaker 1: What do you look forward to the most speck.
Speaker 4: I love a list of like best of of, like
Speaker 4: the year, et cetera, et cetera.
Speaker 1: I love a list like I don't know do use
Speaker 1: notion at work? I've heard about notion, but haven't I'm
Speaker 1: obsessed with notion. Yeah, if I can put it on
Speaker 1: a list in notion, it is on a list in notion, Like.
Speaker 1: I'm actually obsessed with lists. Down it like lists for everything.
Speaker 1: My Christmas list, I have written every single baby list
Speaker 1: you can think of, so like a list for all
Speaker 1: the baby essentials, but then all the baby nice to
Speaker 1: have but not essentials but in the middle, and then
Speaker 1: all the baby luxuries, like we've broken them all up
Speaker 1: because I'm like, everyone's got so much to say. Yes,
Speaker 1: I love a list.
Speaker 4: I love a list.
Speaker 1: To do list. You can cross stuff off that you've
Speaker 1: already done, bess true, and then you feel really productive.
Speaker 4: It feels really good. Sometimes I put things in there
Speaker 4: that I forgot to put in, but I actually have
Speaker 4: done it.
Speaker 1: That's what I do, and then I cross it off.
Speaker 1: It'll be like do washing, and I'll be like, sorry,
Speaker 1: washing machine, I'm a genius. Look at this long list
Speaker 1: that I have now completed.
Speaker 4: It feels really good.
Speaker 1: But what type of lists are we talking about, Beck,
Speaker 1: that you're super in love with today?
Speaker 4: Okay, So I'm thinking like it's kind of an all rounder.
Speaker 4: It's like, at the end of the year, we're thinking
Speaker 4: about our finances, think about ournews, resolutions, We're thinking about
Speaker 4: all of those kind of things. So I guess like
Speaker 4: today I'm mainly wanting to know about Oh well, let's
Speaker 4: talk finances.
Speaker 1: Yeah, I feel like you guys came here to learn
Speaker 1: about finances, not baby lists.
Speaker 2: Yeah.
Speaker 4: Do you feel like that's something that is in your
Speaker 4: wheel house?
Speaker 1: I don't know. I feel like this podcast, she's on
Speaker 1: the money, it's not she's on the baby list, but
Speaker 1: that is actually the garden path. I led you down,
Speaker 1: I said, do you like lists?
Speaker 2: Said?
Speaker 1: I love lists, But I don't know how enamored you're
Speaker 1: going to be with this list, but I know the
Speaker 1: rest of the community is going to be. So today
Speaker 1: I thought that I would talk about the top five
Speaker 1: best savings accounts right now, So we've done the research, Beck,
Speaker 1: I have gone and looked absolutely everything up, done a
Speaker 1: little comparison. Don't worry, we'll obviously post this on Instagram,
Speaker 1: so you don't need to whip out a pen and
Speaker 1: paper to remember it all. We've got your back, made
Speaker 1: another list, sent it to oographic designer. Oh yeah, gosh,
Speaker 1: he's good. But today we're going to be talking about
Speaker 1: the top five best savings accounts.
Speaker 4: I actually can't wait for this. But before we do
Speaker 4: get to the list, fear, I'd like to ask a
Speaker 4: few things. This may be super obvious, but can you
Speaker 4: find a savings account?
Speaker 1: I feel like this is a good one because like
Speaker 1: lots of people will be like, but isn't like my
Speaker 1: normal bank account? My savings account because that's where I
Speaker 1: keep my.
Speaker 4: Savings makes sense, Okays.
Speaker 1: Account is a specific type of financial account that is
Speaker 1: opened with a financial institution. So a lot of people
Speaker 1: will go, oh, that banks, but it could be like
Speaker 1: a credit union or something. It's not just banks that
Speaker 1: offer savings account for the point of saving money rather
Speaker 1: than spending it. So you would know this as kind
Speaker 1: of like a transactional account. So that's usually where all
Speaker 1: your pay goes into, and then you might transfer money
Speaker 1: from your pay to a specific savings account. So the
Speaker 1: idea of a savings account is to easily deposit money
Speaker 1: on a regular basis to earn monthly interest that then
Speaker 1: allows our savings to grow even further, which is, let's
Speaker 1: be honest, very sexits very nice, very very nice, not
Speaker 1: bad at all. Usually savings accounts don't come with debit
Speaker 1: cards because they don't want you to spa easily. That
Speaker 1: makes sense, Yeah, So BECK another major benefit of all
Speaker 1: savings accounts in Australia that are eighty iy's. So an
Speaker 1: ADI is an authorized deposit taking institution and so a
Speaker 1: bank or a credit union would have to register with
Speaker 1: the government to become an ADI. You don't just automatically
Speaker 1: become one, right, So an authorized deposit taking institution BECK
Speaker 1: is a institut. It could be a credit union, could
Speaker 1: be one of the Big four banks, it could be
Speaker 1: any other bank. But they're registered with the government and
Speaker 1: that means they're protected by what's called the FCS. So
Speaker 1: that's the Financial Claim Scheme, which is a government backed
Speaker 1: safety net for deposits of up to two hundred and
Speaker 1: fifty thousand dollars per account holder. So other investments they're
Speaker 1: not covered under this same scheme. But essentially it means
Speaker 1: BECK you can stress less if you've got like, let's say,
Speaker 1: you know, three grand in your savings account. You're like,
Speaker 1: but what happens if the bank fails and crashes. Oh, yeah,
Speaker 1: it's okay because the government guarantees it and you'll get
Speaker 1: your money back. If you're a baller and you have
Speaker 1: more than two hundred and fifty thousand dollars in that account,
Speaker 1: it means they will essentially guarantee up to two hundred
Speaker 1: and fifty thousand dollars, not per account, per person. So
Speaker 1: let's say you're a big dog and you've got one
Speaker 1: point five million dollars in your savings accounts, but you
Speaker 1: have multiple accounts, but they're with the same institution, so
Speaker 1: they're all with the same bank. They will only still
Speaker 1: guarantee up to two hundred and fifty thousand dollars. I
Speaker 1: have seen people who are a little bit anxious, though,
Speaker 1: they go, break this up. If I've got two hundred
Speaker 1: and fifty thousand dollars here at one bank, then I'm
Speaker 1: going to go get bank B. Yeah, then you're five
Speaker 1: hundred thousand dollars is guarantee?
Speaker 4: That works, okay.
Speaker 1: Was going to be the question per institution, per account holder,
Speaker 1: not per account. If that makes sense. You can't just
Speaker 1: open another bank account and put the other two fifty
Speaker 1: in there. I mean, these are really rich people problems,
Speaker 1: like really unrelatable, but I want you to be able
Speaker 1: to understand what that actually means.
Speaker 4: Yes, if it came.
Speaker 1: Up, you know totally.
Speaker 4: Yeah, I don't why I'm so invested in this, Like,
Speaker 4: I'm like, this is something I want.
Speaker 1: To know what rich people are doing with their money,
Speaker 1: how they're breaking it up.
Speaker 4: Right, We've got to protect that stuff.
Speaker 2: I know.
Speaker 4: I love that. Okay, So are there different types of
Speaker 4: savings accounts?
Speaker 1: Yes, it's so fun. They're a number of different types.
Speaker 1: I'll go through them. So first we've got online savings accounts.
Speaker 1: Then we've got bonus interest savings accounts. Then we've got
Speaker 1: high interest savings accounts. Then we've got introductory interest savings accounts,
Speaker 1: and I will round it up with term deposits, which
Speaker 1: you would have heard of before. Right. Yes, So I'm
Speaker 1: not gonna like harp on and on and on about
Speaker 1: each of these. But an online savings account is essentially
Speaker 1: an account that is available online via the web or
Speaker 1: via an app, and it means that you can't go
Speaker 1: into a bank or a financial institution in person to
Speaker 1: access your funds. Make a deposit or ask any questions.
Speaker 1: A really great example of this very popular here in
Speaker 1: Australia Ingva. They just don't have physical stores but they're
Speaker 1: an online banking institution. Does that mean that they are
Speaker 1: less than No, No, it just means they don't have
Speaker 1: physical stores for you to go into, which for some
Speaker 1: people is really important.
Speaker 4: Sure.
Speaker 1: Most commonly, these online savings accounts have a standard interest rate,
Speaker 1: which at the time of this podcast being dropped is
Speaker 1: around four point two percent. Okay, pretty sexy, because you
Speaker 1: remember when no one was getting any interest on their accounts,
Speaker 1: maybe like two years ago.
Speaker 4: Yeah, I remember it being like zero point zero five
Speaker 4: or something.
Speaker 1: One of the best things. So this is not the
Speaker 1: best thing for me. I have a mortgage. You do not,
Speaker 1: So in this circumstance, you are the winner here, my friend.
Speaker 4: Thank you.
Speaker 1: But whenever you hear that the cash rate is going
Speaker 1: up and people are like, oh my gosh, the mortgage
Speaker 1: rate is going up, so do your savings accounts. So
Speaker 1: if you're saving for your first home or you've just
Speaker 1: got some savings to the side, that's actually going to
Speaker 1: be benefited by the cash rate increasing because the bank
Speaker 1: is now going to start paying a high interest rate
Speaker 1: to you, and that's when we want to have our
Speaker 1: eyes peeled and go, hm, is there a better deal
Speaker 1: on off of here? I can't who else can I
Speaker 1: talk to?
Speaker 4: Yeah? I cannot believe that no one knows about that.
Speaker 1: I feel like some people do and take advantage of it.
Speaker 1: But when you're you know, sitting in essentially your chair back,
Speaker 1: you would have heard all of these negative money stories
Speaker 1: going around the media right now, like everyone's screwed, the
Speaker 1: interest rates are going up, what are we going to do?
Speaker 2: Well?
Speaker 1: Actually, if you're in a circumstance where you just have
Speaker 1: some savings and you don't have the overheads of a
Speaker 1: mortgage or like a property or any type of debt
Speaker 1: that you're repaying, yeah, you're actually in a pretty good
Speaker 1: position to recheck your savings account because you should be
Speaker 1: making sure that you're getting some money for the money
Speaker 1: that you've invested.
Speaker 4: Ah. That's right, very good to know.
Speaker 1: The next is bonus interest savings accounts. So, while these
Speaker 1: are quite similar to the online savings accounts, bonus interest
Speaker 1: savings accounts offer their account holders what we call bonus
Speaker 1: interests for meeting certain criteria. So you've got to be
Speaker 1: careful because sometimes they will just look like an online
Speaker 1: savings account and you'll be like, oh my gosh, I
Speaker 1: love this the interest rates like five percent or whatever,
Speaker 1: But you actually have to deposit a certain amount per
Speaker 1: month into that account to access that bonus.
Speaker 4: That's alligatya.
Speaker 1: You would have seen this before, right, Yeah. So the
Speaker 1: criteria is definitely going to vary depending on the banking
Speaker 1: institution and the account that you've decided to open, Like summer,
Speaker 1: I guess age related, you need to be under a
Speaker 1: certain age or over a certain age, or have like
Speaker 1: maximum deposits. So like if they're offering a very sexy
Speaker 1: interest rate back, they might be like, yeah, okay, like
Speaker 1: we'll give that to you max one hundred grand though,
Speaker 1: because like we're not going to give you millions of
Speaker 1: dollars for this. Yeah, So just be aware of those things.
Speaker 1: But they also usually have, as I mentioned before, a
Speaker 1: minimum deposit each month and or a certain number of
Speaker 1: transactions that you need to meet to get that bonus interest.
Speaker 1: So you've just got to be aware. Is that Dodge
Speaker 1: Beck No, not at all, it's actually just their criteria
Speaker 1: for paying it out. I think a lot of people
Speaker 1: will be like well, why are they introducing criteria. It's
Speaker 1: like because obviously they want to attract you to their product,
Speaker 1: but they also want to make sure it's financially.
Speaker 4: Feasible totally, like you are actually going to.
Speaker 1: Get it, yeah, and they're actually going to have a
Speaker 1: client using the account, yes, and actually depositing money on
Speaker 1: a regular basis into that account, So that makes sense.
Speaker 1: But by meeting that criteria, you'll receive a base interest
Speaker 1: rate in addition to the bonus rate. So for example,
Speaker 1: the base rate might be very low, might be like
Speaker 1: zero point five percent or something like that, or the
Speaker 1: bonus interest rate could be as high at the time
Speaker 1: of recording beck like five point one percent, right, which
Speaker 1: is very very sexy. Therefore, the total will then be
Speaker 1: five point one five percent if you meet the criteria,
Speaker 1: and then if you don't, you'll only like default back
Speaker 1: down to that point zero five percent. Sure, obviously a
Speaker 1: rate that can be much lower than if you've just
Speaker 1: gone and opened like an online savings account. So like
Speaker 1: if you're seeing the shiny number of like, oh, this
Speaker 1: bonus interest savings account looks really good because I can
Speaker 1: get five point one five percent because you know, the
Speaker 1: one we talked about before was four point two totally? Like, well,
Speaker 1: I want the higher interest rate. Can you meet the
Speaker 1: criteria consistently or would it just be better to have
Speaker 1: just a standard online savings account get that four point
Speaker 1: two percent, like basically guaranteed examply.
Speaker 4: Yeah, so I guess if you're like not guaranteed to
Speaker 4: be able to transfer or like meet the criteria every
Speaker 4: month or whatever it is.
Speaker 1: And that's like me leading you down the garden pass
Speaker 1: to once again go I am licensed to give you
Speaker 1: general advice. Yes, this is why it is so important
Speaker 1: to understand the differences because do you know how many
Speaker 1: people slide into my dms and they go they what's
Speaker 1: the best savings account? Yeah? I wish i'd could tell
Speaker 1: you what the best is and we'll go through like
Speaker 1: the top five. But the best for you, beck might
Speaker 1: actually be, you know, the bonus interest savings account because
Speaker 1: you do make those regular deposits. But for your best
Speaker 1: friend live, she might not be making those regular deposits,
Speaker 1: and the online standard savings account is going to just
Speaker 1: be better bang for her buck and work better. So
Speaker 1: it is one better than the other. No, it's going
Speaker 1: to depend on your criteria and your ability to meet
Speaker 1: that criteria. Does that make sense?
Speaker 4: That makes so much sense?
Speaker 1: So like you can't just get what your bestie has
Speaker 1: got because it sounded good.
Speaker 4: Yeah, it might not work.
Speaker 1: That's why we've got to do our own research. Yeah.
Speaker 1: I love that, but I did it for you, so
Speaker 1: keep listening.
Speaker 4: Thank you.
Speaker 1: The next is a high interest savings account. I feel
Speaker 1: like that one sounds the sexiest to me.
Speaker 4: Sounds so far, so good, so fast, so good.
Speaker 1: Let me tell you, let me tell you so. High
Speaker 1: interest savings accounts are again similar to bonus interest rate
Speaker 1: accounts because of the high interest rate that you're able
Speaker 1: to achieve if you use them properly. Sure, However, with
Speaker 1: high interest savings accounts, you were guarant heed this interest
Speaker 1: rate without having to meet monthly criteria. Very nice. This
Speaker 1: means there'll be one total interest rate that you'll earn
Speaker 1: each and every single month without having to make a
Speaker 1: certain amount of transactions or limit your number of withdrawal.
Speaker 1: So beck with this one, you might be going all right.
Speaker 1: Or a high interest savings account that just sounds a
Speaker 1: lot like your online savings account, You are absolutely correct. However,
Speaker 1: this could be at a physical branch as well. As
Speaker 1: you know, being online. So your online savings account, let's
Speaker 1: just hypothetically call it ING, not an endorsement, just giving
Speaker 1: you a good example. It's ING that could actually be
Speaker 1: constituted as a high interest savings account, but it's only
Speaker 1: available online, so we're changing the rate of that. Obviously,
Speaker 1: when they're in person, in person companies, in person businesses
Speaker 1: more expensive to run back, so you're usually going to
Speaker 1: see a lower interest rate. So instead of seeing something
Speaker 1: like four point two, you might be like seeing three
Speaker 1: point five to four point two, but they might not
Speaker 1: be as stable as an online bank. An online bank
Speaker 1: is always, from my research, going to have the ability
Speaker 1: to give you a higher interest rate for a longer
Speaker 1: period of time because they have less overheads, and that's
Speaker 1: their main attraction, right, But everybody loves ING one because
Speaker 1: the Barefoot Investor was their biggest fan, but two because
Speaker 1: of the ease of access and the lower fees that
Speaker 1: are associated.
Speaker 4: I was going to say, because it sounded great, great, great,
Speaker 4: I was like, where's this.
Speaker 1: Usually it's just with a quote more expensive institution and
Speaker 1: therefore you might get less back. Does that mean that
Speaker 1: it's not a high interest savings account? No, it's still
Speaker 1: a high interest savings account, and you know what some
Speaker 1: of them could have. Oh hey, Beck, we're going to
Speaker 1: give you five percent if you sign up with us now.
Speaker 1: But you often see in person banks they will limit
Speaker 1: the period of time that you have that. So for
Speaker 1: someone like ing, they obviously hold the right to change
Speaker 1: it at any point. But you know, you might go
Speaker 1: when A and Z and they'll say for the first
Speaker 1: six months, and they'll be a lot clearer about what
Speaker 1: those parameters look like. Just good to know. Does it
Speaker 1: mean that one's worse than the other. No, Again, it's
Speaker 1: about what works for you. And that's Beck, where we
Speaker 1: lead into the second last type of savings account that
Speaker 1: I want to talk about, and that's that introductory interest
Speaker 1: savings account. So if you're willing to change your savings
Speaker 1: account on a semi regular basis, you could say an
Speaker 1: introductory interest savings account could actually be a good option
Speaker 1: for you. The accounts offer much higher introductory interest rates
Speaker 1: than I guess what you'd call the market average. However,
Speaker 1: they usually only last for about four months before reverting
Speaker 1: back to a base level, so you've just got to
Speaker 1: read the terms and conditions. This is where it pays
Speaker 1: Beck because I know if I asked you, let's be honest,
Speaker 1: I know you well enough to be a little bit candid.
Speaker 1: If I said, beckd you read the terms and conditions?
Speaker 1: What are you going to say?
Speaker 4: Definitely not?
Speaker 1: But why is it? Cause You're like, I don't get it.
Speaker 1: It's not worth my time, it's not worth the energy.
Speaker 1: I guess.
Speaker 4: I've never read a single T and C my life,
Speaker 4: and I fear why would I start now, even though
Speaker 4: it's something more important that's like money.
Speaker 1: Let's be honest, Like if Apple's like, oh, we've updated
Speaker 1: our terms.
Speaker 4: And conditions, not jumping on life.
Speaker 1: If you're like no, no, no, They're like, well they're here
Speaker 1: to read it, and I'm like, hmm yep, yep, and
Speaker 1: then they're like, click this button. I read and understood
Speaker 1: the terms and conditions on them straight away. I would
Speaker 1: wonder I would love to see the statistics of quote,
Speaker 1: how long it took each person to read that document? Yes,
Speaker 1: because like, I'm sure that they have the tracking on
Speaker 1: the back end to go, oh, you know, bex terms
Speaker 1: and conditions. We sent her that update. Oh look, she
Speaker 1: opened it zero point two seconds later. She had already
Speaker 1: read and agreed to the terms.
Speaker 4: And conditions very fast reader.
Speaker 1: Like, that's the biggest lie ever told. Yes, I've definitely
Speaker 1: read the terms and conditions anyway. But what I want
Speaker 1: you to do in these circumstances, because it's financially beneficial
Speaker 1: to you, is just have a look at the t's
Speaker 1: and c's. They will be in plain layman English. It
Speaker 1: won't be confusing, I promise. I think a lot of
Speaker 1: us don't do it, especially when it comes to banking
Speaker 1: and financial services products, because it's overwhelming. You're like, I
Speaker 1: don't know what this is, Like I don't really want
Speaker 1: to have to go through it. But I promise they'll
Speaker 1: say introductory rate of you know, five percent for first
Speaker 1: four months, then we'll revert back to zero point five percent. Sure,
Speaker 1: so you actually know what you're signing up for, because
Speaker 1: if you don't want to have to change your bank
Speaker 1: account again in six months, yeah, probably not the product
Speaker 1: for you, beck, I guess.
Speaker 4: If like, and this is probably really silly thing to say,
Speaker 4: because it depends on the person against absolutely not. Well,
Speaker 4: I was gonna say, like, personally, I would be going
Speaker 4: for an introductory one. Yeah, after four months, be like
Speaker 4: my and go to a different one that is like, we've.
Speaker 1: Got to put the work in.
Speaker 4: You've gotta put the work in.
Speaker 1: Put the work in. And also depends how many of
Speaker 1: us say we're going to put the work in. And
Speaker 1: then don't I see this in the credit card space,
Speaker 1: because how many people have done zero dollar transfers or
Speaker 1: balanced transfers of their credit card to another credit card
Speaker 1: and they're like, smash this out of the water because
Speaker 1: now it's zero percent. Yes, so they do it. No,
Speaker 1: then they revert back to the higher interest rate. And
Speaker 1: I'm like, I don't want to be a debbie downer.
Speaker 1: I don't want to be the bearer of bad news.
Speaker 1: But I can't be trusted, which means that a lot
Speaker 1: of you can't be trusted either. So we just need
Speaker 1: to be honest and go V would you actually in
Speaker 1: six months do that? I'll be like, I mean, if
Speaker 1: you forced me to, probably do it.
Speaker 4: Sure, But if you happen to remember happened to be
Speaker 4: in a productive mood on the day that you remember, like.
Speaker 1: My ADHD, He's gonna go do the list today of
Speaker 1: what the best bank account is and then we're gonna
Speaker 1: transfer to it, and I'm gonna get the motivation today
Speaker 1: to change it later down the track. I've already forgotten, babe.
Speaker 1: I'm looking at something else. But that's okay, because if
Speaker 1: you look at like someone like Jessica Ricci, Yep, she's
Speaker 1: a wizard. She definitely keeps up with stuff like that.
Speaker 1: She puts reminders in her calendar of like what time
Speaker 1: of the year to check these things, and like transfer that.
Speaker 1: She is who we all want to be when it
Speaker 1: comes to money. But this is like a do as
Speaker 1: I say, not as I do kind of podcasts.
Speaker 4: Sure you know so?
Speaker 1: Anyway, moving on from interactory interest weight savings accounts to
Speaker 1: term deposits, you would have heard of a term deposit.
Speaker 1: I talk about it a bit more when we're talking
Speaker 1: about I guess investing, because it involves a bit more
Speaker 1: of a time commitment. So a term deposit differs slightly
Speaker 1: from a savings account on the premise that you actually
Speaker 1: can't make withdrawals from a term deposit until your quote
Speaker 1: term or the time limit has ended, whereas other savings
Speaker 1: accounts they allow you to make withdrawals as necessary. Don't
Speaker 1: get me wrong, Beck, you will be able to actually
Speaker 1: withdraw your money in an emergency if it's in a
Speaker 1: term deposit, but you forfeit the money that you earned.
Speaker 1: Oh so you would They would say, oh, well that
Speaker 1: five percent, you don't get that because you terminated the
Speaker 1: contract early. And that's part of it, right, Okay. The
Speaker 1: benefit of having money in a term deposit means it's
Speaker 1: locked away, which works very well for someone like me,
Speaker 1: out of sight, out of mind, can't touch it with
Speaker 1: a fixed interest rate paid out either at the end
Speaker 1: of the term or on a monthly or annual basis,
Speaker 1: depending on how you've chosen. Usually a term deposit does
Speaker 1: require a minimum deposit, so they might go, oh, you
Speaker 1: have to have a minimum of five grand in this account,
Speaker 1: which in Australia the usual deposit is between five and
Speaker 1: ten thousand dollars For a term deposit. The term period
Speaker 1: can then range from a few months to many many years,
Speaker 1: and obviously the longer your term is for that usually
Speaker 1: correlates to a higher interest rate being paid. So like
Speaker 1: if you were to lock in a term deposit for
Speaker 1: three months, they're going to go, well, it's not very
Speaker 1: long as it beck, We'll give you three percent. But
Speaker 1: if you would like to give us your money for
Speaker 1: a year now we're talking, does that make sense.
Speaker 4: That does make sense, but I'm so confused as to
Speaker 4: like what the benefit for the holder is, Like, you
Speaker 4: know what I mean.
Speaker 1: It's as safe a way to make money, so I
Speaker 1: don't want to say safer. It's a more conservative way
Speaker 1: to make money. So if we go back to, you know,
Speaker 1: the investment episodes, if you haven't listened to them, go
Speaker 1: and have a listen to them. They are really really important.
Speaker 1: We did like a mini series with Chares's which I
Speaker 1: think was really really powerful, and I'm quite proud of
Speaker 1: that work, to be honest. But you might be somebody
Speaker 1: who's not ready to bite the bullet with investing. Beck.
Speaker 1: But you go, I still have like ten or fifteen
Speaker 1: thousand dollars sitting here not going to use that might
Speaker 1: be for a house deposit, might actually just be your
Speaker 1: life savings that you're like, well, I'm never going to
Speaker 1: touch it. It's not your emergency fund. By the way,
Speaker 1: we do not put our emergency funds in term deposits,
Speaker 1: do we, Beck, No, No. By the way I'm looking
Speaker 1: at you, you're like, oh, I knew that.
Speaker 4: I just learned that right now, Which.
Speaker 1: It's very different for an emergency fund. An emergency fund
Speaker 1: is a certain amount of money that you have allocated
Speaker 1: to be able to access in an emergency, and I
Speaker 1: want to talk about that because so many of you
Speaker 1: will go, well, it's not working for me. Is that? Like,
Speaker 1: if you're saying that I can get five percent back
Speaker 1: on my money, you may as well lock it in
Speaker 1: a term deposits not being used right now. No, no, no,
Speaker 1: You need to be able to access your emergency fund
Speaker 1: in an emergent by just going up to an ATM.
Speaker 1: If you cannot do that, it is not in the
Speaker 1: right place. And that money is working for you. But
Speaker 1: it's not maybe working for money for you, it's working
Speaker 1: on your mental health and making sure you're financially secure
Speaker 1: in an okay position. Like to me, an emergency fund,
Speaker 1: it doesn't actually have to be making money. When I
Speaker 1: was a bit younger and didn't have a mortgage, my
Speaker 1: emergency fund was in an online savings account, didn't have
Speaker 1: a debit card, but I knew that in an emergency,
Speaker 1: I could jump on my phone, transfer the money to
Speaker 1: my transaction account, and use it on my debit card
Speaker 1: if I needed to pay for anything. Sure, Now I
Speaker 1: have a mortgage, my emergency fund is sitting in an
Speaker 1: offset account to my mortgage because that just makes financial
Speaker 1: sense for me. Sure, I could go on and on
Speaker 1: about emergency funds, and I have in like the last
Speaker 1: five years of podcasting.
Speaker 4: She loves an emergency fund.
Speaker 1: I adore an emergency fund. But when it comes to
Speaker 1: a term deposit, it could just be that happy medium
Speaker 1: between you're not ready to invest, but you also want
Speaker 1: your money working harder for you than it currently is
Speaker 1: and getting a bit of return, but you're also maybe
Speaker 1: not ready to dip your toes in the water when
Speaker 1: it comes to investing. You might choose a term deposit
Speaker 1: so that at least the money that you've made is
Speaker 1: now making some money, even if it's less. Does that
Speaker 1: make sense?
Speaker 4: That does make sense.
Speaker 1: It's a bit more of.
Speaker 4: A secure hm.
Speaker 1: I would say investment.
Speaker 4: Okay, that is good to know, But I'm also curious
Speaker 4: about the actual bank. Why is it good for them?
Speaker 2: Like?
Speaker 4: How are they making money out of this?
Speaker 1: I love this question. Okay, so banks make money, but
Speaker 1: you putting your money into their bank account, right, and
Speaker 1: that doesn't make sense? But what do you think they
Speaker 1: do with that money? They lend it to people who
Speaker 1: want mortgages and loans. Oh, so they're lending your money out.
Speaker 1: And as much as you probably didn't know this, and
Speaker 1: the banks are going to go no, no, no, we
Speaker 1: don't touch individuals like savings accounts. You've always got access
Speaker 1: to it, that is true, but they're funds under management.
Speaker 1: So the total amount of money that they have in
Speaker 1: their kitty. Essentially, the more that they have, the more
Speaker 1: they can lend out. And right now, while interest rates
Speaker 1: are going up, the banks are essentially cacking their decks
Speaker 1: a little bit, Beck, because they're going to need some
Speaker 1: more money because people who are in debt are maybe
Speaker 1: not making their own payments, so it makes sense to go, oh, Beck,
Speaker 1: we're going to entice you a little bit if you
Speaker 1: put more money in your bank account. Obviously your ten
Speaker 1: grand is not going to change the world. But if
Speaker 1: all the Becks in Australia are now putting more money
Speaker 1: into their bank account, that bank is more financially secure.
Speaker 1: So if you look at what it costs to get
Speaker 1: a mortgage at the moment, it will be higher than
Speaker 1: your average savings account. The savings accounts are always slightly
Speaker 1: under what the mortgage rate is for that bank. Right
Speaker 1: so banks are making money by you putting money in
Speaker 1: there and then they essentially lend the money out. Do
Speaker 1: not get me wrong. That is an incredibly simplified version
Speaker 1: of what happens because obviously the RBA, so the Reserve
Speaker 1: Bank of Australia, they manage what's called the cash rate,
Speaker 1: and often banking and financial services institutions will borrow money
Speaker 1: from the government or borrow money from even bigger institutions
Speaker 1: to lend out. But one of the ways that they
Speaker 1: keep money coming through the door is to have you
Speaker 1: have your money sitting in an account that ultimately they
Speaker 1: do have access to. Is it safe and secure? Yes,
Speaker 1: it's one of the reasons why the government has that
Speaker 1: guarantee scheme. Ye, it's why they go no, no, no, don't
Speaker 1: worry about e becleg you'll definitely get your cash back.
Speaker 1: But in the background they do have a lot more
Speaker 1: money to play with and lend out to other people.
Speaker 4: Okay, that makes sense. I've always been curious about that.
Speaker 1: I like that you asked, because it's one of those
Speaker 1: things that we often don't think about. Yeah.
Speaker 4: I'm always like, Okay, we're putting our money.
Speaker 1: Why are they paying me to have my money?
Speaker 2: Yeah?
Speaker 4: How are they making this money.
Speaker 1: They are making a lot of money.
Speaker 4: Okay, thee Now that I know how banks make money,
Speaker 4: my mind can be put to rest, and I think
Speaker 4: that let's go to a really quick break and on
Speaker 4: the other side of the break, the moment you've all
Speaker 4: been waiting for, including myself, the he's going to tell
Speaker 4: us her top five best savings accounts right now.
Speaker 1: Don't go anywhere, guys, it's juicy.
Speaker 4: Welcome back, OKAYV I'm so excited. We've talked about the
Speaker 4: ins and outs of savings accounts and outside for the
Speaker 4: moment of truth. What are your top five best savings
Speaker 4: accounts right now?
Speaker 1: All right, Beck, are you ready for the top five
Speaker 1: best savings accounts?
Speaker 4: I'm sorry, ready, joke's on you.
Speaker 1: I'm going to do a caveat here because obviously they're
Speaker 1: not quote the best. They are just to the accounts
Speaker 1: that currently have the highest variable interest rate at the moment.
Speaker 1: I'm going to go through the maximum variable interest rate,
Speaker 1: who the institution is, what their standard variable rate is,
Speaker 1: whether there's an intro period or not, or if there's
Speaker 1: any conditions, and we're going to go obviously from lowest
Speaker 1: to highest. So you have to listen to the rest
Speaker 1: of my podcast.
Speaker 4: That's very clean.
Speaker 1: Yes, right, So first things first, we've got the me
Speaker 1: Home Me savings account, and this has come up because
Speaker 1: it is like, it's not just the top five. I
Speaker 1: actually have six to present because in typical Victoria divine fashion,
Speaker 1: I said, I want to present five of the top
Speaker 1: five accounts. But then I also found one and it's
Speaker 1: the number one one, but it has a few extra
Speaker 1: terms and conditions on it. Sure, that was like, it'll
Speaker 1: be like a little little something something on top, right,
Speaker 1: so we'll do the five plus one.
Speaker 4: Good idea.
Speaker 1: I'm just ruining the list for you.
Speaker 4: Yeah, it's a very I think I'm following though.
Speaker 1: Yeah, but top six anyway, So we've got the bank
Speaker 1: account and it's maximum variable interest rate right now, it's
Speaker 1: five point five to five percent. Sounds good, kind of sexy.
Speaker 1: Their standard variable rate is zero point five to five percent.
Speaker 1: They do need due to deposit a minimum of two
Speaker 1: thousand dollars each and every single month, which for some
Speaker 1: people is feasible. That's why it's on the list, my friend.
Speaker 1: And does it have the government guarantee? You ask, yes,
Speaker 1: it does.
Speaker 4: Great standard variable rate means, is that like the average.
Speaker 1: It's the default.
Speaker 4: It's the default. Okay, okay, it's the default.
Speaker 1: So you know how we're talking before about how they
Speaker 1: have shiny intro offers and they go, oh, here's this,
Speaker 1: you know, maximum variable rate, like this is the most
Speaker 1: you'll get from us. Sure they have complete control of
Speaker 1: being like, we don't do that anymore because obviously you
Speaker 1: can't predict what the market's going to do, and they
Speaker 1: need the flexibility to turn that off. So it will
Speaker 1: default back down to point five to five percent if
Speaker 1: everything hit the fan.
Speaker 4: Ah, I see, thank you, so good.
Speaker 1: Good. Number two, we've got Macquarie. So McQuary Savings account
Speaker 1: comes in at five point five zero percent beck, but
Speaker 1: their standard variable rate is four point seventy five percent. Whoa,
Speaker 1: so still a little bit higher. So that kind of
Speaker 1: looks a bit sexy. It's great for an intro period
Speaker 1: of four months. Ah gotcha?
Speaker 4: I see.
Speaker 1: Is there any monthly maximum rate conditions? No, there's not,
Speaker 1: So you could just use this as you go. I
Speaker 1: would just be wary of what happens when that four
Speaker 1: month intro period wears off. Then I feel like it's
Speaker 1: like one of Australia's favorite accounts just because of the
Speaker 1: barefoot investor, like he created this cult following with Ing,
Speaker 1: So that is the I INNG savings maximizer. Okay, right now,
Speaker 1: maximum variable in interest rate a five point five percent
Speaker 1: drops back down to a standard variable interest rate of
Speaker 1: point five to five percent. It's ongoing. You do need
Speaker 1: to deposit monthly at least one thousand dollars and make
Speaker 1: five transactions.
Speaker 4: Oh so, like they're encouraging you to spend.
Speaker 1: They're encouraging you to use that as an account that transacts,
Speaker 1: So it's a savings maximizer. Usually you can't just have
Speaker 1: a savings maximizer account with Ing. You also have to
Speaker 1: have their daily account, in which case you would need
Speaker 1: to make those five monthly transactions.
Speaker 4: Gotcha? Okay? And when you say transactions, like, would it
Speaker 4: count if I just transferred money from one savings account
Speaker 4: to a transaction account or do.
Speaker 1: Every bank is going to be different, So what that
Speaker 1: looks like to Ing might look very different to NABB
Speaker 1: or you know, A and Z, which is fine. Again,
Speaker 1: you need to read your terms and conditions. But usually
Speaker 1: it's a deposit into or out of that account. It
Speaker 1: could be you know, you paying for your my key.
Speaker 1: It could be you transferring some money in from you know,
Speaker 1: a dinner that your friend. O. Do you cash from five?
Speaker 1: Standard usually transaction?
Speaker 4: Sure?
Speaker 1: Okay, so four we have the first option banks savings account.
Speaker 1: So that comes in at four point seventy five percent
Speaker 1: with a standard variable rate of two percent. Pretty good,
Speaker 1: it's on going too, oh, very good. So they're not
Speaker 1: going to go, oh, there's an intro period. No intro period,
Speaker 1: it's ongoing. But you do get this minimum deposit amount
Speaker 1: per month. Gotcha, it's only one hundred bucks. That seems
Speaker 1: that's a bit more reasonable.
Speaker 4: I can deal with that a bit more.
Speaker 1: Relatable, you know. Yeah, but you can't make any withdrawals.
Speaker 4: Oh oh oh okay, they.
Speaker 1: Just really want you to save.
Speaker 4: That's actually really cute.
Speaker 1: I kind of like it. I kind of like the trap.
Speaker 1: And that's why when we're talking about this stuff, it's
Speaker 1: like not one size fits all, Like you go, V,
Speaker 1: what should we be looking for? And I go, well,
Speaker 1: what's your criteria? There's so much stuff that you could
Speaker 1: be looking for. At the end of the day, you
Speaker 1: could be like, you know, talking about the type of
Speaker 1: account you want to have, or your interest rate, or
Speaker 1: your minimum or maximum deposit. You could be talking about
Speaker 1: like fees or even goal setting, your capability and your
Speaker 1: time frame, like if you are the type of person
Speaker 1: that's like Becka me a bit impulsive, aren't we, bab Yeah,
Speaker 1: that's nothing, So I would say, like, we good at
Speaker 1: it together. It's why we need to produce it in
Speaker 1: the room with us at all times, all time to
Speaker 1: stop us from going rogue. So that would work for me,
Speaker 1: beck But I'm also feeling like a little while ago
Speaker 1: on the show, you told us about how you have
Speaker 1: a money tin because you can't get the money out
Speaker 1: because it's in a tin, and I just feel like
Speaker 1: that might work for you too.
Speaker 4: Yeah. Well that tim actually unfortunately wasn't strong enough for
Speaker 4: these big, strong hands.
Speaker 1: Did you get the can opener out?
Speaker 4: I did.
Speaker 1: I got a lot of it's a bit naughty.
Speaker 4: Anything I could I got out.
Speaker 1: But I think this next time you do that, can
Speaker 1: you please film it? Make great contact?
Speaker 4: I can do. This is why this would be perfect for.
Speaker 2: Me and you.
Speaker 1: Yeah, yeah, just based on that criteria completely. So beck
Speaker 1: I included the first option bank savings account in my
Speaker 1: number four slot because they had that four point seventy
Speaker 1: five percent. But then They also had that standard variable
Speaker 1: rate of two percent, which felt a little bit safer
Speaker 1: than the one I'm going to put in number five,
Speaker 1: even though their interest rate or their maximum variable interest
Speaker 1: rate was higher. It just felt like that made more
Speaker 1: sense to me, and it's my list, so I do
Speaker 1: what I want, You do what you want. So coming
Speaker 1: in at number five is the Bank of Queensland Future
Speaker 1: Saver account. This future Saver account, it does have a
Speaker 1: little bit of criteria on it though, so it's for
Speaker 1: fourteen to thirty five year olds, HM, quite specific, which
Speaker 1: is why it kind of ranked a little bit lower
Speaker 1: than the other one, even though they have a higher
Speaker 1: interest rate. Their interest rate is sitting at five point
Speaker 1: four percent, which is very nice, but their standard variable
Speaker 1: rate was zero point zero five percent, so that's obviously
Speaker 1: lower than the one before before we were talking about it.
Speaker 1: Two percent, yes, standard rate. So do you see why
Speaker 1: I might have like dropped it down a little bit.
Speaker 4: Yeah, that makes sense.
Speaker 1: Because I'm a bit rude. I didn't just go, oh,
Speaker 1: the highest interest rate is the best, which is exactly
Speaker 1: what we want you to do as well, because the
Speaker 1: highest interest rate does not equal the best. Because I
Speaker 1: obviously could rant about this for six million years, and
Speaker 1: I honestly have like I've done it for five years
Speaker 1: and we haven't slowed down there. But when it comes
Speaker 1: to the investment world, often people will say, be what's
Speaker 1: the best type of investment? And I can't answer that either,
Speaker 1: not because I don't want to. But if you say
Speaker 1: the more specifically, what's the highest yielding type of investment
Speaker 1: in Australia? So what returns the most cash older, Well,
Speaker 1: it's shares, right, Whereas a lot of people will want
Speaker 1: to hear me say property or like their asset that
Speaker 1: they want to invest in. Pragmatically speaking, shares have outperformed
Speaker 1: the other three main asset types in Australia. So it's shares,
Speaker 1: then it's property, then it's fixed interest, and then it's cash.
Speaker 1: Here in Australia. Right, there's a hierarchy. It's just how
Speaker 1: it works. Doesn't mean it's the right fit for you, Beck,
Speaker 1: absolutely not. Just because it's the highest return doesn't mean
Speaker 1: shares are the right thing for you to invest in. Yeah, absolutely,
Speaker 1: does that make sense? And they same with bank accounts.
Speaker 1: Highest interest rate does not mean best, say with throbernuation accounts,
Speaker 1: highest rate of return does not mean best. You need
Speaker 1: to look at the fees and the bells and whistles
Speaker 1: and everything else that you get into it. Because as
Speaker 1: I said in my first book, and I got a
Speaker 1: lot of slack for this, I said, when you pay peanuts,
Speaker 1: you get monkeys. Some people didn't like that.
Speaker 4: Well, though, that's fair enough. You don't want to be
Speaker 4: this is what I say. It's very similar. You don't
Speaker 4: want to be Trojan horsed.
Speaker 1: No you don't, and that's what we're trying to save
Speaker 1: you from. Yes, So the Bank of Queensland, to carry
Speaker 1: on about them, they're intro period. There is none sexy good.
Speaker 1: But they do require a minimum monthly deposit of one
Speaker 1: thousand dollars and five eligible transactions eligible exactly. The word
Speaker 1: eligible means you need to read the terms and conditions.
Speaker 1: And then I wanted to like, do the little cherry
Speaker 1: on top, yes please, which is again a high interest rate. Obviously,
Speaker 1: when I was comparing it, I put the first option
Speaker 1: bank higher than the Bank of Queensland. But then this
Speaker 1: is a Westpack account and it g it's like to
Speaker 1: be the cherry on top because it's a lower interest
Speaker 1: rate than the Bank of Queensland, but a higher standard
Speaker 1: variable rate. Ah. So the Westpac Life account, which unfortunately
Speaker 1: is only for our listeners from the age of eighteen
Speaker 1: to twenty nine, has a maximum variable rate of five
Speaker 1: point two percent, but the standard variable interest rate is
Speaker 1: two percent. Very good, so it's a bit higher. No
Speaker 1: intro period, which is really nice. No minimum deposit amount,
Speaker 1: but you do have to have five debit card purchases
Speaker 1: each and every single month to get to that maximum
Speaker 1: variable rate.
Speaker 4: Okay, so they want you to spend a little bit.
Speaker 4: They want you to treat yourself.
Speaker 1: They do. They want you to like be active with
Speaker 1: their product. Yeah, which is not rude. They're literally paying you.
Speaker 1: Absolutely nobody owes you anything that could work for me.
Speaker 4: Laugh.
Speaker 1: I really like using your debit card. I do, so
Speaker 1: it's all good. I totally get it. But Beck, how
Speaker 1: do you feel about that? What are your thoughts, values, beliefs,
Speaker 1: and behaviors about this app.
Speaker 4: This is really interesting because I am with Iron G
Speaker 4: and I've been curious that you are. Thank you. Well,
Speaker 4: I was really curious about the interest rate and stuff,
Speaker 4: and like wondered why I it never kind of applied
Speaker 4: to me. But it's because I'm not just depositing once.
Speaker 1: Read the terms and conditions.
Speaker 4: Did not read the terms and conditions, but this is
Speaker 4: really interesting. It's got me thinking, I'm assuming with Bank
Speaker 4: of Queensland you must be in Queenland.
Speaker 1: No, it's just the Bank of Queensland. Oh, very good
Speaker 1: to know, Okay, like the A and Z Bank or
Speaker 1: the National Australia Bank, like they they're just names.
Speaker 4: Yeah, I love this.
Speaker 1: It's where it started, all right.
Speaker 4: I think I'm going to have to read up on
Speaker 4: these and figure out what is best for week.
Speaker 1: All right, well, let's hop off. I feel like you
Speaker 1: and I are probably going to dive deep into doing
Speaker 1: a little bit more research on what bank account might
Speaker 1: work for you because I really want to play with
Speaker 1: it too. Lucky us, But thank you for tuning in.
Speaker 1: I hope you guys have the best week and we'll
Speaker 1: see you bright and early on Friday.
Speaker 4: Bye guys.
Speaker 1: The advice shared on She's on the Money is general
Speaker 1: in nature and does not consider your individual circumstances. She's
Speaker 1: on the Money exists purely for educational purposes and should
Speaker 1: not be relied upon to make an investment or financial decision.
Speaker 1: If you do choose to buy a financial product, read
Speaker 1: the pds TMD and obtain appropriate financial advice tailored towards
Speaker 1: your needs. Victoria Divine and She's on the Money are
Speaker 1: authorized representatives of Money. Sheper Pty Ltd ABN three two
Speaker 1: one is six four nine two seven seven zero eight
Speaker 1: AFSL four five one two eight nine