All Cashed Up

Interest rate rises arenât all doom and gloom, the Prospector finds. They offer investors the perfect opportunity to give consideration to âat callâ cash accounts.

By The Prospector ·
5 May 2006

Home owners have been in the firing line after the Reserve Bank's 0.25% lift in official cash rates earlier this week. Yesterday NAB lifted its variable home loan rate by 0.25% to 7.57%; BankWest and BankSA followed with similar increases this morning.
Curiously, the banks are not in such a hurry to give money away. It always takes little longer for interest rates to trickle down into your “at call' (no time restrictions) savings account.

In light of this delay, we’ve asked InfoChoice.com.au to provide us with a list of the top 20 interest rates for accounts larger than $5000, a sum just big enough to take advantage of a market correction by snapping up some serious discounts.

The top five cash rates are offered by, in order: BankWest 6%, Railways Credit Union 5.7%, HSBC 5.7%, Easy Street 5.65% and Elders Rural Bank 5.65%.

Investors can expect some ' or all ' of these lenders will move to lift deposit rates in the coming weeks.

Two of the top five cash rates are offered by multinational corporations such as HBOS (Scotland) and HSBC (Hong Kong), which are both looking to capture market share and muscle in on Australia’s lucrative wealth management industry. Offshore banks Citigroup (US) and ING (Holland) also make it into our top 20 list.

Credit unions, co-operatives and boutique banks such as Elders Rural Bank dominate the list, accounting for 11 entries. The Railways Credit Union and Easy Street Financial Services both rank in the top five, offering a rate of 5.7% and 5.65% respectively. The agribusiness-focused Elders Rural Bank offers 5.65%.

Competition among the banks is fierce. The 6% offered by BankWest includes a bonus 0.5% that is only available for the first 12 months. With this in mind, there is only 0.3% between the top 20 accounts.

Only five Australian banks make it into our list. It is left to the second-tier banks such as the Bank of Queensland and Suncorp Metway to fly the flag in the top 10, while the NAB and the Commonwealth bank limp into the top 20.

Individual circumstances will dictate which account is right for you. Investors need to balance the benefits of high interest rates with other considerations, such as account access and fees.

MBEST RATES ON OFFER FOR $5000 OR MORE
Institution	Product Name	Interest rate
BankWest	TeleNet Saver (special intro rate for 12 months)	6.00*
Railways Credit Union	Express Saver (S50)	5.70
HSBC	HSBC Serious Saver	5.70^
Easy Street Financial Services	EasySavings	5.65
Elders Rural Bank	ERBonline Savings	5.65
Select Credit Union	SelectDIRECT - Internet based account	5.60
Bank of Queensland	WebSavings Account	5.60
Esanda Finance Corporation Ltd	Esanda Online Saver	5.55
Suncorp	Everyday Options Sub-account (Outside Qld)	5.55**
Citibank	Citibank Online Cash Manager	5.50
Members Equity Bank	InterestME Savings Account	5.50#
National Australia Bank	National iSaver	5.45
Big Sky Credit Union	Net Invest	5.45
Austral Credit Union Ltd	Net Saver Account	5.45
mecu	Cyber Saver account	5.40
St. George Bank	directsaver from dragondirect	5.40
Police Credit	easyinvest	5.40
Australian Central Credit Union	e-savings Account	5.40
Commonwealth Bank	NetBank Saver	5.40
Victoria Teachers Credit Union	Online Saver Account	5.40
ING Direct	Savings Maximiser	5.40
* Reverts to 5.50 after 12 months. ^ Interest rate valid for every month you don’t make a withdrawal ** Interest in queensland = 5.45% # Interest only payable on amounts over $3,000 Current as at May 5, 2006 Source: Infochoice.com.au