Saving with Bankwest

Running your savings and transaction accounts can be a tricky business that can either cost you a small fortune as regular bank fees add up over time, or for the savvy customer, can actually make you money.

Bankwest has stormed to prominence in recent years, moving outside its traditional base in Perth and making the big step to go national. The bank's target market is what we would call the savvy customer - being someone who is prepared to spend a bit of time learning about a product, and adapt there transactions to suit the product where required. With Bankwest, your effort will be rewarded with savings from higher interest rates and lower (or no) bank fees.

So how can Bankwest customers take advantage of this? Well, according to their website, the Telenet Saver offers Australia's highest intro interest rate, at a staggering 7.00% for the first 12 months - that's less than a percent of a mortgage interest rate! After that, you revert to a still competitive variable rate of 6.50%.

The Telenet saver also offers the following benefits:

  • Absolutely no fees
  • No minimum deposit
  • Access to your account 24/7 via online banking
  • Interest paid monthly

So, the Telenet Saver is worthwhile if you have some spare cash to park, and you want to earn competitive interest but still have immediate access to your money. The Telenet Saver can be linked to an account at any Australian Bank, but the strategy can be advanced by linking to another Bankwest product, The Hero Transaction Account.

The Hero's first key selling points is there are no account fees and unlimited transactions! This is hard to find anywhere these days. The small print says there are still fees for naughty stuff like bouncing cheques and using non-affiliated ATM's. Bankwest is affiliated with Commonwealth and Westpac ATM's so that is really something you can avoid.

The other selling point for the Hero is an interest rate of 5% p.a. on balances of up to $5,000. This is by far the most attractive rate available on a transaction account which provides you with all the usual conveniences including ATM's, cheque book, EFTPOS, BPAY plus telephone and internet banking!

The two main catches are that the portion of a balance over $5,000 does not attract interest, and that you must deposit at least $2,000 per month to your account. The good news is that the 'savvy customer' can easily get beat the system! Here's how:

Catch 1 - Minimum Deposit: Get your salary paid into your Hero Transaction Account. Over a full month, this will most likely exceed $2,000 - you can do the math.

Catch 2 - No interest over $5,000: Why would you need more than $5,000 in your transaction account for long periods? If you are saving extra - transfer it to your Telenet Saver and earn even more interest!

As a little example of how much you can make, if you keep an average balance of $4,000 in a Hero Account, and make quite a few transactions each month - you will earn $200 in interest and pay no fees. In your standard major bank transaction account - you will earn on average $0.40 in interest and pay up to $200 in fees.

So if you want to be a 'savvy customer' - What could you do with an extra $400 in a years time?

Published on October 10-th, 2007 in Personal Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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