Wow, some banks are still offering rates this high! Look up http://www.canstar.com.au if you want to compare. 6.11% is the best online savings rate (offered by UBank) and best term deposit rate around at the moment. If you're banking on the rates dropping, locking it in for 6 months would be a good move.
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agreed… but cheers op for the headsup, helped me.
p.s. rabo just now sent an email saying they are reducing rates effective from 19 December, 2011:
"The variable base rate of our High Interest Savings Account is reduced by 0.35%p.a. for balances up to $200K, reduced by 0.30%p.a. for balances $200K - $1M and for balances over $1M it will be reduced by 0.25%p.a. The 'max' standard variable rate on our PremiumSaver will be reduced by 0.30%p.a."
Yeah I got that email too. Pfft its amazing Ubank has managed to stay on top for so long!
yes, opened one first thing this morning.
Also the savings account with the automatic savings plan is at this rate i think. That way you can access your money whenever you want and it will grow by $200/month if you don't touch it.
The savings account with ASP hasn't had an interest rate drop since the last RBA rate drop. RaboDirect reduced their interest rate today so it's possible Ubank will still drop their savings account rate.
Good thinking. I might hedge my bets and transfer half my balance into this 6.11% term deposit, and keep the remainder in the variable account. That way if it interest rates go down I'm winning…sort of, and if they go up I'm still winning…sort of.
You're a person who see the glass half full.
Just spend it on bargains here, and you'll "save" much more :p
LOL this is not a bargain but a normal rate for Ubank :D I had my money in ubank for a year I think…. finally thought it would be better off in the home loan, so all gone :(
Ubank is a great place to save :)
Not worth it people. Even if UBank drop their rate by 0.25% to 5.86%, the loss of interest will be minimal. Let's say you have 100k in savings, if you were to put it in a 6 month TD at 6.11, you'd make $3055 after 6 months. In a USaver account at 5.86%, you'd make $2966 after 6 months, or about $89 less. Is an extra $89 worth the hassle of opening up a TD, and not having access to your funds? I say no.
Actually taking into account monthly compounding, the difference would be $128.15. And also factor in the likelihood that UBank will drop the rate by more than the 0.25%, more likely drop by 0.40%. That makes the saving $204.94.
Though even at that amount, I agree with you that its not worth the time and headache of setting up the TD. Probably only worth it if you're forecasting another rate drop at the next meeting.
Very true wise sir. Technically another rate drop within the 6 months of the TD, which is highly likely.
If you are already a UBank customer, setting up the TD takes less than 5mins.
I was really surprised how fast it took to set it up. So easy to make a terrible decision in the 1 minute it took to lock in my money for 6 months. @_@
the term deposit does not compound monthly
yes, that's the downside. I thought BOQ compound their term deposit monthly for a fixed term but not with UBANK.
So really, you're earning more interest with the Online Saver than a Term Deposit even when they are at the same rate?
Sorry, same rate, yes you would earn more with online saver.
In my case, I'm totally not planning to use that spare cash for anything at the moment. No mortgage, no car loan, and too risk-averse to try anything in the stock market right now. So might as well get the extra cash from predicting an RBA move within the 6 months, or maybe a UBank independent move!
Can also consider tax advantages…interest earned from the Term Deposit will be taxed in the 2012/13 financial year.
Not if my TD matures before 31/06/12!
yes sorry, only if you open up the TD after new-years.
The rate drop won't happen until probably February so I worked it out to be only about $23 difference. The compound interest from Usaver actually makes the difference smaller compared the term deposit, because the principal is growing so more interest every month if at same rate. If there is no rate drop in the next 6 months, we will be about $44 worse off with term deposit… Hope that's right.
-Removed-
I've had a ubank saver for many months now.. it's really the best online saver around..
Do you guys still get the 0.5%?
I have my ASP active but I stopped getting 0.5% extra interest rate since early this year.
Yes I still get it, if you aren't getting it, make sure that you renew your ASP - it may have expired.
Yeh I still get the bonus .5% with ASP, you'll find the rate has dropped though. Used to be 6.51 with bonus interest, now only 6.11.. ;(
Worst thing about this account is all the tax I have to pay on interest..
Hmm, interesting that they decided to drop the rate by 0.5%, despite the official rate cut only being 0.25%. Maybe this means the current rate will remain?
Thank you
Just locked in for another 6 months
Expected interest rates to drop by 0.5% by early next year
thank you for someone finally posting something liek this hahah.
within the next 6 months there could be 1 or even 2 cuts. making this a good speculative deal!
:)
If you're under 29 you get 6.11% no matter how much you deposit. Not locked in at all. It's called USaver Reach
Capped at 5k…
Thanks for the post! Just locked in 80% of my savings in the 6m Term Deposit as well - I think it's pretty safe to say you won't get this rate any more anywhere in 1-2 months time…
Probs best for the forum.