Cash Rates: How They Compare
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What is clear from today's table, supplied by infochoice.com.au, is that if you want the best cash interest rate, stay away from the big four banks '” they're just not in the game.
That's because they rely so heavily on cheap deposits for their profit margins, and because the new entrants trying to win market share from them have lower costs.
BankWest's TeleNet saver has the top interest rate when it comes to at-call cash accounts. It's one of a range of national products marketed by the WA-based bank, bought by Scottish bank HBOS in 2003.
But as with all financial products, it pays to read the fine print. The generous interest rate of 6% reverts back to 5.5% after the first 12 months, which evens the field considerably.
What is remarkable is the absence of the big four banks in the top half of the list: the NAB only manages to just limp in at 10th place. For many investors opening an account with the Railways Credit Union won’t be an option, but you might find that a boutique bank or credit union may be able to meet your needs better than a large bank.
Apart from a fair interest rate, another aspect to consider is the features you would expect your account to offer. The emergence of the "internet only" savings account allows banks to cut overheads and pass the savings on in the form of a better rate of interest.
For many investors, this particular account model will be insufficient. You might need to access your cash at a moment's notice; perhaps you are looking to trade on markets that are open outside business hours, or you may find the whole idea of a "virtual bank" somewhat flimsy.
If you were paying attention, you would have noticed that of those accounts we’ve included in the table only one issues you with an ATM card. Citibank’s Online Cash Manager account offers account holders a statement, internet/phone access and an ATM card. This account from Citibank also offers an interest rate of 5.5% '” the same amount offered by BankWest’s Telenet Saver after the initial introductory rate.
Everybody needs access to cash, but having too much of it at call can seriously stunt the growth of your investment portfolio. To get the most out of an at-call cash account you will need to pay careful attention to how you will expect to use the account and the types of fees it charges. You will need to balance your desire for a good rate of interest with the kinds of features that you require from such an account.
| TOP 20 AT CALL CASH ACCOUNTS | |||
| Institution | Product Name | Other Account Access |
Rate (%)
|
| BankWest | TeleNet Saver (special intro rate) | Internet, Phone |
6
|
| HSBC | HSBC Serious Saver | Internet, Phone |
5.7
|
| Railways Credit Union | Express Saver (S50) | Internet, Phone |
5.7
|
| Easy St Financial Services | EasySavings | Internet |
5.65
|
| Elders Rural Bank | ERBonline Savings | Internet, Phone, Statement |
5.65
|
| Bank of Queensland | WebSavings Account | Internet, Phone, Statement, Counter |
5.6
|
| Esanda Finance Corporation | Esanda Online Saver | Internet, Phone |
5.55
|
| Suncorp | Everyday Options (Outside Qld) | Internet, Phone, Statement |
5.55
|
| Citibank | Citibank Online Cash Manager | Card/ATM, Internet, Phone, Statement |
5.5
|
| National Australia Bank | National iSaver | Internet, Phone |
5.45
|
| Commonwealth Bank | NetBank Saver | Internet, Phone |
5.4
|
| ING Direct | Savings Maximiser | Internet, Phone |
5.4
|
| St George Bank | directsaver from dragondirect | Internet, Phone |
5.4
|
| Suncorp | Everyday Options | Internet, Phone, Statement |
5.4
|
| Victoria Teachers Credit Union |
Online Saver Account | Internet, Phone |
5.4
|
| AMP Banking | eASYSAVER Account | Internet, Phone |
5.3
|
| Encompass Credit Union | Emoney Account | Internet, Phone, Statement |
5.3
|
| Australian National Credit Union |
eSaver | Internet, Phone, Statement |
5.25
|
| Illawarra Credit Union | iQSaver | Internet, Phone, Statement, Counter |
5.25
|
| Westpac | Max-i Direct | Internet, Phone, Statement |
5.25
|
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