Now is the time to take account of your needs

I'm often asked by friends and family about things such as how to find the best bank account, or the best credit card, or the best home loan. The basic answer, after I've let them know I don't have an Australian financial-services licence (AFSL), is usually something along the lines of: "It depends what you need it for."

I'm often asked by friends and family about things such as how to find the best bank account, or the best credit card, or the best home loan. The basic answer, after I've let them know I don't have an Australian financial-services licence (AFSL), is usually something along the lines of: "It depends what you need it for."

Let's take something as (apparently) simple as a bank account. You need to ask yourself questions such as: do you need to access the funds on a regular basis? Are you using it for saving surplus cash? Will a regular payment be going into the account?

These are important. Many transaction accounts offer minuscule levels of interest, that are often much less than 1 per cent, so if you are fortunate enough to be in a situation where you will have more money sitting in the account, you want it to be earning more than that.

And even with interest rates coming down, you could still be earning 4.5 per cent on an online savings account with bonus rates.

There is no better week to get your head around your finances than this week, which is MoneySmart week, a national initiative of the Australian Government Financial Literacy Board.

MoneySmart Week is an independent, non-profit initiative promoting financial literacy.

Last week I wrote about the MoneySmart health check moneysmartweek.org.au, which can help you get your finances in order. An important part of any overview of your finances, is a budget and a good bank account can help you with that budget. The MoneySmart website (moneysmart.gov.au), is slightly separate to MoneySmart week, and is run by the Australian Securities and Investments Commission (ASIC) but it has lots of great tools and information that can help with understanding products.

Back to the best bank account. Make sure you read the fine print. I have an account with a building society that has no branches near my home. But it has a fee-free arrangement with a major bank for use of its ATMs, if, and only if, a regular deposit exceeding a certain amount goes into that account. That meant when I started to work as a freelance writer, and I didn't have a single large deposit; that is, salary, going into that account each month, my ATM fees started to escalate.

And in another bank-account issue, I set up a couple of extra business bank accounts to quarantine money for GST and super, with another institution that does have a very strong local presence. But they had mistaken the kind of account I was after and were charging me $10 a month for an account that I barely used at all. To their credit though, they were very helpful when I told them of the mistake.

So the key to getting the best kind of any financial product, is making sure you understand your needs, and your financial situation, before you apply for anything.

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