Bills Account for Direct Debit Only

djsweet on 25/06/2019 - 11:52
Last edited 25/06/2019 - 12:27

I am thinking of setting up a 'Bills Account' which will be used to pay only bills via direct debit. Having direct debits come out of my everyday transaction account messes up my weekly budget and it is annoying to make sure there is always the right amount of money in there. My plan is to regularly transfer money into the 'Bills Account' from my main account as well as have a buffer amount in there at all times.

I do not really need a card facility, and I would like maximum possible interest. Saver accounts seem like they would fit the bill, but most saver accounts (ING Maximiser for instance) do not allow direct debiting.

So far the only suitable one I have found is AMP Saver (1.85%) but unclear if Direct Debit is allowed. Ubank would be suitable, but I already have a USaver + Ultra set up for other purposes and it seems that you can't have multiple.

Does anyone else have a similar arrangement, and what have you found is the best 'Bills Account'?

In summary, I am looking for a bank account with:

  • Direct Debit allowed
  • Fee Free
  • Unlimited withdrawals without losing interest
  • Decent interest rate
Financial

Comments

  • Skramit on 25/06/2019 - 12:22
    +3

    I use a credit card for ALL of my direct debits which at last count was about 25 haha. It seems much easier than worrying about transferring the amount sin and out of an account for every bill?

    With another account just for DD you're still gonna have to transfer money across constantly, and that one time you forget the company will send angry letters :)

    • djsweet on 25/06/2019 - 12:28
      +1

      I would be happy to do this too, but some services (for example my Electricity) will only Direct Debit from a bank account without incurring an extra charge.

      • orangetrain on 25/06/2019 - 12:45

        There are late charges that are way more than the credit card surcharges.

        • djsweet on 25/06/2019 - 13:27

          Trying to avoid the late charge and the credit card charge.

  • vetopower on 25/06/2019 - 12:38
    -1

    Almost no savings accounts allow direct debits.

  • Quantumcat on 25/06/2019 - 12:48
    +1

    This is making more trouble for yourself. You say you want to avoid messing up your weekly budget and getting in trouble if there's not enough money - but having a separate account means you're even more likely to not have enough money because you might have forgotten to put more in and there was enough in your main account. And if your main account doesn't have enough money for the bill how is having another account going to produce more money for you?

    • djsweet on 25/06/2019 - 13:29

      I have enough money. The issue is I don't keep the money in my transaction account, I keep it in my saver - which cannot be direct debited from.

      • Quantumcat on 25/06/2019 - 13:45

        Oh I get it now, sorry!

      • Skramit on 25/06/2019 - 14:26
        +1

        The easy solution here is keep the money in your saver and use a credit card.

  • spackbace on 25/06/2019 - 13:37
    +5

    Decent interest rate seems pointless for an account which is just used for bills, where you'll allocate the monthly amount in there and nothing more. So it'll never have a huge amount of money gaining interest.
    The main thing to focus on would be no annual fee, and that's really it.

    • djsweet on 25/06/2019 - 13:49

      True, I guess I'm not so concerned about the interest rate. Although I will still be keeping about $2k permanently in there as a buffer. I suppose no interest vs 2.5% is only $50 per year.

      • spackbace on 25/06/2019 - 13:50
        +1

        only $50 per year.

        Pick 1 of those sign-up deals that offer you $50 after a couple of transactions? ING etc

        Then you can consider it even ;)

  • jocilyn on 25/06/2019 - 13:42

    I use ING purely as my "Bills Account". ING/Me Bank have high interest rate, basically you'd have to get a normal everyday account with them and then a maximized savings account? They both have conditions for the maximum rate ING for e.g. is $1000 + card purchases that are settled (not pending) each month they give you the highest rate. So I guess it would work you'd have to double check if a direct debit is a purchase.

    • djsweet on 25/06/2019 - 14:34

      I like the look of ING and ME Bank, but they both have an n-card purchases requirement, which obviously wont be met if I am just using the account for paying bills by direct debit.

      • Beansbeansbeans on 26/06/2019 - 08:35

        Just chuck all your life expenses on the card, that’s what I do. I use it for my fuel and groceries as well as my direct debits. Nice and simple, my main account is with ING so no fuss if I have a bill due on payday.

  • k-rokfm on 25/06/2019 - 14:38
    +1

    I have an account set up for all my bills so i can just set and forget it - I know how much needs to go into it each fortnight and get it transferred in there straight from my paycheck. Saves me having to worry about paying for rego, electricity and things all in one go

    • djsweet on 25/06/2019 - 14:42

      Sounds like what I'm trying to do. Just trying to find the best bank account to use for this purpose.

      • IainND on 26/06/2019 - 08:47

        This is what I do. I have automatic transfers set up for the day after payday each month, sending my monthly expenses to my bills account. I then have another auto transfer move it out the day before each bill is due, to the card or account that's making the payment.
        My Bills account is a savings account, just so I get that tiny bit of interest on it.

  • Seraphin7 on 25/06/2019 - 15:37
    +2

    At our place we use a 4 account strategy …

    1. The saver … where we store whatever level of assets we want to have in cash. A fixed amount is paid from this every month to "the hub". We use the UBank USaver Ultra for this.

    2. The hub … all monies go in and out of this account (earnings go in and DDs and other payments go out including "an allowance"). Once a month I set the balance of this account to a fixed amount by sweeping excess back to "the saver". Enough is kept in this account to cover all expected bills over the month. We use the Macquarie CMA for this.

    3. The transactor (x2) … each week my wife and I get "an allowance" from the "the hub" out of which we each buy the relatively small personal/incidental items. We use the ING Orange Everyday for this.

    4. The credit card … most household purchases go through this account (my wife and I each have a card). This gets paid in full each month via DD from "the hub". We use the Coles Platinum for this.

    • hashtagbargain on 25/06/2019 - 15:45

      Why cant you use 4 for 3? You missing out on those points…

      • Seraphin7 on 25/06/2019 - 15:51

        When we set it up, cash was used more than it is now. Originally, this amount was more an amount to take out of the ATM than anything else. We could migrate now as you've suggested, although I'm not sure the Coles CC can be used on Google Pay?

  • inventel on 25/06/2019 - 15:52
    +1

    I know Macquarie Savings accounts allow for direct debits… I use one in a similar fashion and have my credit card direct debit from there.

    Unfortunately the interest rate is now down to a pathetic 0.85%pa, however for bills I prefer to have the convenience of "out of mind" knowing direct debits will just work rather than having to worry about shuffling money around at the right time.

  • Findmebargain on 25/06/2019 - 19:15

    OP, agree that UBank set up is best for direct debit s. If having joint accounts for bills work for you then setting up another set of usaver+ ultra accounts with Ubank in joint names is possible as I have that set up.

    Actually I didn't know that one cannot have multiple individual accounts with UBank but assuming you're right.

    Edit: just looked up the T's & C's apparently you can have up to 10 accounts including joint. OP, you're in luck :)

    • djsweet on 26/06/2019 - 09:08

      Yes you are right. I did some more research, and you can have up to 10 USavers, but only one Personal Ultra and one Joint Ultra. This will likely be my best option.

  • SlickMick on 26/06/2019 - 10:41

    No home loan? An offset account I believe is the ultimate answer, so every $ is reducing your interest (hence the equivalent of paying ~4% tax free) until the day the bill is due. If bill accepts credit card DD, that gets you another month or so, plus points.

    If I was renting, I reckon I'd buy an investment property just so I had this setup.

    My setup would be smooth and seamless, except some bills only accept savings account DD, but I can manually bpay with credit card. So I manually pay those bills for credit card points and delayed payment as mentioned.

    btw does the barefoot investor condone these multiple accounts? My brother has setup all these different accounts: holiday savings, school fee savings, bills, expenses etc and every pay day distributes to each account. I told him to stop doing it and put it all on his home loan, and it's a very simple calculation (or keep a spreadsheet) to determine the balance of each virtual account.

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