Hi guys,
Just wondering if there are any financially savy folks out there who can give me some tips. I wanna get more out of my money by earning a higher interest rate. Currently I am on the ANZ savings account and earn an annual rate of 1% interest. The highest interest rate that ANZ offers is an account that gets me an annual interest rate of 2%. Are there any other savings account out there that can earn me a higher rate such as 3% or more? Thanks and I love to hear your feedback.
I say 5 figures and I can leave it in there for a year or so
Check out infochoice - TMB offering 3.00% for a 1 year term deposit, or ME Bank offering 2.85%, or a bunch of others close to that. Plus a bunch of online savings accounts around 3% (at least at their introductory rate). Will probably depend on exact amount, but gives you something to work from.
Might also try going into an ANZ branch and speaking to them if you havent already - letting them know you will be taking the money elsewhere to get 3% might encourage them to offer you a better rate.
we had friends that introduced us to hui. >10% pa tax free.
What is this and how is it tax free?
i think it translates to a loan club.
Ok, still not clear on the details, but how is it tax free?
@whooah1979: Just googled it (I think, hui has a lot of results). Holy crap.
I don't think 10%pa is anywhere near enough to compensate me for risks like that.
Also as I read it, you get income from the interest payment offered by the person taking the loan/pot/whatever. Which is interest income, which is taxable.
Just because you are not declaring income does not make it tax free.
@whooah1979: I have and it sounds interesting - prevalent in the Chinese, Vietnamese and Korean cultures it is essentially a loan club where members commit to regular monthly contributions and those seeking to 'borrow' the money 'bid' to take an early pot.
For example: I organise a Hui with 10 people at $1,000 per month (round numbers for simplicity). As the Hui Master I could take the first pot, or not. Members can 'bid' to take the pot.
So, let's say one member offers to pay $100 for the first pot of (notionally) $10,000. That is $10 deducted per member from their $1,000, and the winner takes away $9,900 ($10,000 less the cost of taking the first pot - $100).
This continues for the next few rounds - each member again bidding $100. Same result each time.
Then it gets close to the end. By this stage each member has contributed $990 x (say) 8 = $7,920.
At this point the last two members don't want to pay anything so they bid $0. The last two pots are a straight $10,000.
So - the end result is:
For the first eight participants - they have paid $9,920 and received $9,900.
For the last two participants they have paid $9,920 and received $10,000 - and both groups have been in the system for 10 months.
I think those numbers are right. (are they, that doesn't look right… eh, don't care that much.)
If this is correct - the 8 members who have taken money presumably have done so for income generating activities and have incurred a borrowing expense (of $100) which should be deductible. However they have no record of this deduction if necessary.
Equally, the other two members who have only been generating a passive income have generated an 'interest' income which is taxable in their hands (especially since this has the hallmarks of income generation being highly systematised, routine and recurring).
At least that's the way I see it. Maybe you can get an opinion from a tax lawyer or accountant.
AND
that is assuming nothing goes wrong and someone in the club doesn't flake out on you.
Which is interest income, which is taxable.
if hui is deemed by the ato as an income stream and taxable. then it must also be a regard as an expense.
@whooah1979: Yes - the expenses you incur in deriving a taxable income are deductible. Of course, the income is then taxable.
Yes - the expenses you incur in deriving a taxable income are deductible. Of course, the income is then taxable.
hui isn't new and not unique to se asia. susu and tanda are two other names for this type of loans.
https://en.wikipedia.org/wiki/Tanda_(informal_loan_club)
A tanda is the Latin American term for an informal rotating savings and credit association (ROSCAS). They are operated globally, but have over 200 different names that vary from country to country.[1][2] They are also known as cundinas (Mexico), susu/Osusu (West Africa and the Caribbean), hui (Asia), juntas (Peru), pollas (Chile), pandeiros (Brazil), paluwagan (Philippines), Stokvel (South Africa) or quiniela. An English name for such an association is a partnerhand. In short, a tanda is a form of a short-term no-interest loan among friends.[3]
the ato are well aware that this system of lending money exist in the community. they don't see it as an income stream otherwise they would have cracked on it a long time ago.
@whooah1979: Yeah, I wouldn't be relying on the ATO's enforcement priorities as proof of what they consider acceptable tax practice.
In addition Australia has quite strict laws on lending institutions and banking providers.
@whooah1979: The ATO doesnt have to review each scheme or system that people come up with to deem them taxable or not taxable.
Income is taxable. Expenses incurred in earning that income are (generally) deductible.
Just because they haven't cracked down on the 'hui income' doesn't mean it is tax free. It means they have priorities.
Just because they haven't cracked down on the 'hui income' doesn't mean it is tax free.
it is for the time being.
@whooah1979: Lol. I haven't been caught or declared the income =/ tax free.
Feel free to link to the policy or private ruling which states this.
Without bothering to read anymore about it, it sounds like it would be close to zero sum for the ATO, which probably shows why they don't care.
Anyway derail over, your suggestion is not a bank or legitimate investment option.
Post about it in the next Tax AMA.
@blaircam: Why would someone not take the pot in the first week then leave the club? Spend $1100, get back $10,000. Easy money!
@railspider: This is actually key to the whole scheme and is why the Hui Master must have credibility and standing so that the group they put together is reliable. Sometimes the Hui Master is responsible for making good any shortfall by any members - but not always.
In some cultures it is considered dishonourable to even think about doing such a thing. Taking the money and not fulfilling your obligations to the group would bring enormous shame on you and your family.
However, there are many cases of Hui fraud where people have done exactly this. Affinity fraud happens, even in traditional Chinese, Vietnamese and Korean communities.
@railspider:
See the article from Baysew below. People do flee early on and the "master" of the hui can end up massively in debt.
The Maidstone stabbing which shone a light on an alleged Vietnamese loan system
It's made the news now.
Also, the OP asked about bank accounts, not random investment schemes..
I heard bikies pay 15%pa tax free.
I heard bikies pay 15%pa tax free.
being a drug mule is a bad idea.
only if you get caught.
О, я заинтригован, расскажи мне больше;)
Что это, старый мудрый?
Типичный лохотрон начинается именно с этого…
@blitz
lolwut??!?!
used a translator app on my phone.
ANZ Online Saver has a "honeymoon" bonus interest for new accounts. My experience has been you can keep renewing your bonus each time it expires (usually 3 monthly). ANZ reserves the right not to reoffer the bonus on expiry. I've been renewing the bonus for a couple of years on my Online Saver.
https://www.anz.com.au/personal/bank-accounts/savings-accoun…
Bonus interest for new customers
Open your first ANZ Online Saver and get bonus interest for 3 months. You could earn 2.55% p.a., based on the current standard variable rate of 1.00% p.a. (subject to change) and a bonus of 1.55% p.a. for 3 months.
ING Savings Maximiser has 1.50% p.a. standard rate, plus a 1.50% p.a. bonus if you deposit $1000+/month into a linked ING Orange account. The total rate of 3.00% is ongoing provided you make the monthly deposit of $1000+. Zero account fees.
https://www.ingdirect.com.au/savings/savings-maximiser.html
You can compare lots of savings accounts here to find the best one for your needs https://www.canstar.com.au/savings-accounts/
If you have $1,000+ coming in each month in a lump sum (eg salary), you could have just the ING and have your salary deposited to the ING savings maximiser account. Keep your savings there. It earns 3.0% p.a. You can get out cash by moving some funds to the linked ING Orange Everyday account and using the card at an ATM.
There's also RAMS which only requires $200 deposit a month, but then, you can't make a withdrawal for it (or you lose the bonus interest rate).
If you don't have a transaction of $1,000+ coming in each month, but you do have over $1,000 in savings, you could have bank accounts at 2 banks.
ING Savings Maximiser + ING Orange Everyday account
UBank USaver + Ultra Saver
Keep your savings in the ING Savings Maximiser most of the time.
On the 1st of the month, move $1,000 to your UBank accounts.
When the money clears, move it back to ING Savings Maximiser.
ING will continue to pay you the bonus rate and you will get close to 3.0% p.a. on your money.
ME Bank 3.05% interest, only catch is you gotta use paywave once a week.
When I spoke with them, they said, it's not just once a week (eg once in the first week of the month, once in the second week etc)
They said our paywaves cannot be more than 7 days apart.
So the person on the phone said we're safest if we try to do it every 3 to 4 days, allowing a couple of days in case we are sick or too busy.
ME Bank sent an official message to all customers last year. Relevant part:
How can I get the Online Savings Account bonus interest rate?
The simple answer is just use tap & go at least once every Monday to Sunday and you'll get the bonus interest.
The more comprehensive answer is that you'll get the bonus rate if you make one tap & go purchase:
- every successive 7 day period (1st day of the month to the 7th, 8th to the 14th, 15th to the 21st and 22nd to the end of the month), OR
- every calendar week (e.g. Monday to Sunday) ending within the month.
That's way better than I what I was told …
Unfortunately, on a search of their website, it's not what they say now; link to mebank is here
>
How do I meet the bonus interest condition of making a weekly purchase
using Tap and Go™?To ensure you always qualify for the Bonus Rate, simply make a PayPass transaction at least once every 7 days. If you leave more than 7 days between PayPass transactions, you may not be eligible for the Bonus Rate for that month.
This sounds like a pretty serious contradiction :S
When I first opened the account, it was Monday-Sunday as a week. The terms and conditions just state "weekly". In general, I never had a problem with scanning a $1-2 grocery item on paywave once or twice every week.
The rate can be negotiated (a bit) with the bank/financial institution if it is large.
depending on how much the deposit was and how often it was to be drawn upon you'd be better going for a managed fund of sorts.
ING 3% deposit $1000 per month. No other strings attached.
Available on one account for balances up to $100,000
RAMS 3%
Do you need the money at call? If not, how long a term can you invest it for? 30 days? 2 years?
Ballpark amount? (4 figures, 6 figures, etc?)