UBank lift their rates today to 6.26%!
Awesome!
AND ITS EFFECTIVE IMMEDIATELY!
So just a recap:
This gives an online savings account rate of 6.26% to all customers who have an ASP of $200 or more into their accounts, and is valid for the first $200,000.
What more can I say apart from:
Come on UBank beat Rabobank!!
Referrer and referee each receive $20 after referee makes 5 settled card purchases within 30 days.
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If you "like" it, you can actually hit the plus sign, on the left hand side of the original post, above the total score. :)
YAY! too bad I just bought an investment property and now have to pay lots of money in interest instead of earning interest :(
but you pay less tax, still a win-win !
Thats not a win! Claiming Negative gearing by definition means that your investment is losing money.
Well hopefully your investment is losing money on a trivial level and then when it comes time to sell said property you are hoping for one massive capital gain!!!
So negative gearing doesnt have to be bad!
@JDogman: But if you make a large capital gain, you lose around half that to capital gains tax … which probably won't leave enough to buy another property in the same area.
@SomeGuyOnOzB: I once worked with someone 15 years ago who was waiting for property prices to go down so he could buy a home - he is still waiting. Remember that if a property is negatively geared NOW, it probably won't be in 5 years time as rents will rise but the price you paid remains the same. So you may lose out in the short term (and may be able to claim this back as a tax deduction), but long term - you're a guaranteed winner with property. Capital gains tax is only payable when/if you sell, the answer is NEVER sell, redraw and keep buying. (I've worked in the real estate industry for the past 15 years and see many more winners from property than losers)
@jason101: Completely ignoring the interest that you are paying on it in the mean time.
With all investment classes there is never such thing as a guaranteed winner because future percieved income streams get factored in to current prices. If property doubled tomorrow, and you bought next week, would it still be a guaranteed winner?
As for the many more winners than losers argument, the last 15 years have been a once off, believe it or not.
@muzzamo: The "interest you pay in the mean time" - is covered by the rent, the shortfall is tax deductible in many instances. For the past 110 years in Australia property prices have doubled every 10 or so years on average. Before that, no one kept records.
And if property doubles tomorrow, rent will probably also increase proportionately, so yes you'd still be a winner. People who bought today would be smiling even more than they already are.
@jason101: Rent has not increased proportionally with housing price increases.
Rent has gone up, but to my (limited) knowledge, it is not generally proportional to the rent that is earned.
you’re a guaranteed winner with property
Yea, just wait until the current bubble bursts and try telling people that.
@anthony: So the current bubble bursts (which I dont think it will - but lets say it does) - Who cares - if you're not thinking about selling prices in any given day, month or year don't really matter.
In 30 years time when I retire every property I own will be paid off and I'll be living on the rent, bringing in more each week on a weekly basis than I ever earn't as a weekly wage in my working life.
The doom and gloom thinkers can generally be summarised as people with between 0 and 1 properties, once you get over the 2-3 property hurdle the world suddenly looks like a brighter place because the mechanisms of wealth creation seem second nature.
@cytotoxic: I've got a feeling everyone was thinking that in the US just before the GFC. It's amazing how quickly people forget what that was about.
@zappy32: I know what i was talking about and it has nothing do do with the GFC
http://en.wikipedia.org/wiki/Australian_property_bubble
@cytotoxic: Politicians and media won't dare to say there will be a bubble because if they do, everyone becomes panic. Hence, majority of house owners in Australia will believe Properties will never go down even though housing prices are just way too expensive to afford.
@anthony: Property is good if you have the money and the cash flow to sustain it. The beauty about property is that if you are going alright with cash flow, and the bubble bursts, you just hold on to it. The problem arises when you're neck high in debt, you have cash problems, rising interest compounds this problem, and you are forced to sell at unfavourable prices.
Remember as long as the asset still exists, you do not have any "gains" or "losses" until they are realised (ie. you sell), which means that if you can meet your other expenses and obligations, you hold the absolute trump card in that you decide when to sell, if ever. This goes with all other investment vehicles - it's just that property because it's actually a tangible asset won't disappear like shares could.
That's just general of course - like if you bought a house and 5 years down the track the government decides to build Sydney's 2nd airport on your back fence, then well…….
And as jason said, the toughest part about property is the first few years. Given time, rental income will increase, and hopefully you will pick up a few promotions along the way increasing your ability to pay off your loans quicker if you wish, or to start reinvesting some of your gains. Remember that apart from interest rate changes, your monthly repayments on a 30 year loan are fixed for the 30 years - the value of $3000 per month today is going to be vastly different to the value of $3000 per month in 10 years.
The situation in the US with the subprime mortgage is quite different. In that scenario, people were just way above their heads in debt to begin with. They had loans that were ridiculously inflated. Like people drawing average/less than average wages obtaining 7 figure loans. The other thing in the US of course is that loans are non recourse - ie. if you can't pay it, just hand the keys back to the bank and that is it. So of course when property prices plummeted, why waste your hard earned on a loan that's double the current value of your house?? Whereas in Australia, if you can't afford to repay the loan, your house gets repossesed and you are still liable for the difference between the value of your house and your remaining loan amount (ie. it is much harder to get yourself out of an unfavourable situation here than it is in the US).
The beauty about property is that if you are going alright with cash flow, and the bubble bursts, you just hold on to it.
Not that this happens often, though it has happened before …
If the institution or it's creditors demands immediate repayment of your loan, in full, you may need more than a cash flow that can sustain your regular payments. (Assuming your property still has a loan or mortgage against it)
your monthly repayments on a 30 year loan are fixed for the 30 years
I thought it was, for some if not all institutions, that the payment is calculated as if repayments were made over 30 years, at the set interest rate …
Then when the interest rate changes they advise you if they need to increase your regular payments to cover the increases or not.
Assuming the budget passes, from 1 July 2011 the first $500 earned on interest bearing accounts will be tax free. Finally a little bit of good news for long suffering savers (who pay the marginal tax rate).
$500 is the annual interest off $7987 at 6.26% pa
I mean it's great that the interest on the first $8k is tax free…however if they actually want to reduce personal debt they are going to have to offer better incentives than that. I mean sheesh…there are so many reasons to get in to debt! stares at house prices
By definition everyone pays the marginal tax rate.
The MTR is the tax rate on your last dollar of income you earned, not the TOP marginal tax rate (which I think is what you meant).
And I thought it was first $1000? Not like it makes much of a difference, at best it means a saving in tax of $450.
Measly $150 for those on 15%.
Also, there's a big difference between a promise and something actually delivered right now.
Also a difference between a regular promise and a KRudd promise.
Not quite - 50% discount on tax on the 1st $1000 of interest income earned.
http://www.budget.gov.au/2010-11/content/at_a_glance/html/at…
So maximum benefit is at savings around the $16k mark.
Going off on a tangent, I'm surprised that planned increases of the superannuation cocontribution have been shelved and not reported whatsoever. This is the super contribution scheme where low and middle income earners who make voluntary contributions from after-tax earnings could get up to an extra $1.50 in their super from the government for every $1 they put in themselves for the first $1000. This was cut to an extra $1 for each $1 as a budget saving measure before the GFC, with the view to increasing it back up to the $1.50 mark over a few years, but this has not only been canned, but the income thresholds have been fixed as well for the next couple of years.
http://www.ato.gov.au/individuals/content.asp?doc=/content/0…
If the government's aim is to increase national savings as well as get people to contribute more voluntarily to their super for their retirement (instead of being forced by increasing the super guarantee), I thought either restoring the super contribution level or increasing the contributions cap would be the most effective way to go. But I guess it passes the logic test, which means it has to be stopped.
I saw the rate change early this morning and wasn't sure whether to post a bargain. It's just 0.05% more, but every little bit helps. Still, most of my money is currently with RaboDirect as they offer 6.4% to new customers, or on any extra money deposited after 20 May for existing customers.
RaboDirect 6.4%.
No need to worry about a "savings bonus" just 6.4% p.a no catch.
http://www.rabodirect.com.au/savings/high_interest_savings/d…
The special rate is a fixed 1.40% p.a. above our standard variable rate, currently 5.00% p.a.
This rate is only till the end of the year. SO yes, there is a catch
While it is very unlikely interest rates are going to fall a variable rate is not a catch it is a standard feature of accounts, not a catch.
The ubank saver account is also a variable rate as is every other savings account.
Then if you look at the ubank rate assurance they do not mention RaboDirect so they do not intend to be beating Rabo rates.
Seriously, some people have no clue. Have fun when your "special" rate runs out. UBank all the way!!
Both accounts have no fees and are easy to move money into and out of. Why not have both and take advantage of the best offer? When the special runs out move the cash to where the yield is better. The 'fun' doesn't have to run out.
Keep earning less money then.
The bonus rate is good until the end of the year and you dont need to have a monthly deposit to get it.
I just moved some money to rabodirect, but it was still showing 5% interest rate. Can you actually find the information about the 6.4% interest rate inside their internet banking website? (after you login, from the account details)
5% is the base rate which is what your account is reflecting
+1.4% is a bonus and the site just is not reflecting it.
I am not a new customer, but I have $0 in my rabodirect account previosly. So basically I cannot confirm if I am actually getting 6.4%, until I receive the interest next month?
So basically I cannot confirm if I am actually getting 6.4%, until I receive the interest next month?
Well 6.4% is written across the rest of their site.
Once you are logged in you are told what the current variable rate is, which is currently 5%.
Until the end of the year you receive a 1.4% bonus on what ever is listed when you are logged in.
My account still says 5% however on may 31 I was paid two interest payments, one was a "Bonus interest payment" so you definitely are going to get 6.4%.
The bankwest bonus interest type accounts don't even tell you what interest rate you are earning, it is just blank
@anthony: Think the Rabo 6.4% applies to only NEW deposits - the existing balance remains at the lower standard rate
@Wally: That's why I am worried, since I cannot tell if the NEW deposits will actually get the 6.4%.
@leiiv: It is specifically stated on the rabodirect website that they will.
http://www.rabodirect.com.au/savings/high_interest_savings/d…
As i said ignore the mention of 5%
@leiiv: when you log in to Rabo online banking, under account details to the right of 'Accrued Interest:' there is a section labeled 'Accrued Bonus:', thats your extra 1.4%
You can also generate a pdf statement that will show you how much of you savings qualifies for the 6.4%.
Yes, you can.
When you log on and look at your account details or transaction listing, you can see how much interest you have earned this month
AND
how much bonus interest you have earned
yay
how come this beats rabo. rabo is clearly 6.40 and this is 6.26 ??
i have both and i know 6.40-6.26 is a small %
but still, not a winner at all
event rabo has till dec 2010, just put it there till dec then move it to other bank.
And when interest rates go up b4 Dec??
So really, it's a simple thing for the consumer:
Open a Rabo account ASAP. Move your money from UBank there. You don't need to leave anything in your UBank account. Till December… .
Now set an alert on your computer to tell you to move the money back from Rabo to UBank in Decemeber.
Situation settled. No bank is better. They're all crooks anyway. They look after themselves, you have to look after yourself. Instead of spending time bickering here on what each point is, just look after yourself and get on your horse to open a Rabo account if you don't have one.
Case in point: If UBank simply gave 6.4% now, nobody's money needs to move.
It's not as though people who prefer Rabo are too dumb to understand their bonus rate runs out at the end of the year, that people who prefer Ubank are to dumb to understand their bonus rate requires regular deposits, or that anyone is too dumb to know the bank that's ahead this month may fall behind the next.
The facts aren't in dispute, so what the heck are people arguing about? Do we now have online savings account "fanboys" who just bicker for the fun of it?
I haven't looked into it much but we have had on other deals:
- fans
- people associated with businesses pretending they are just fans
- people hired to promote businesses pretending to be fans
A quick scan of the above suggests we do have people who are either expressing "fan" sentiments or are perhaps defending their choice not to move their money when interest rates change (for whatever reason).
Its all about relative laziness and how much you have in there. If you have 10k in there its probably not worth switching but if you have 100k in there it probably is…
maybe I'm missing something or don't understand the posting guidelines on this site… but this doesn't seem like a bargain to me. Why isn't this deal removed?
Financial bargains usually involve fractions of a percent gains over rival offers. You are right that this is not really a "bargain" in the true sense of the word, but I still think it's important to advertise very good online savings offers.
Someone who keeps their money in normal transaction accounts would earn close to zero percent. Highlighting fee free, easy to open and use online savings accounts to these people is important.
Also the effect of compound interest is important. I might only get 0.5% more with BankX than BankY, but over many years that works out to a sizable difference. For example, $10,000 kept in an online savings account over 30 years at 6.4% grows to $68,197.95. Just a little less interest (6.26%) gives $65,393.43.
moved to Rabobank..
at the moment, yes Rabo is better.
Rabobank has my sword, my axe, my bow, …and my ring.
Seriously, how can you guys consider this bargain, Rabo clearly has better rate 6.4% and you don't have to worry about depositing $200/month, and unlike other banks like ING the bonus rate applied to everyone.
@those who said Rabo bonus is only until end of the year, interest rate is very likely to go up in the from now until end of the year, beside I bet Rabo will just extend the period or update the rate once it rises. Also fund with Rabo doesn't have any restriction so if by then other bank offer me higher rates, I will just move it.
It's actually Rabobanks offer that is more restrictive. The bonus only applies to new money coming into your account. That's OK for new customers but existing customers that already had some cash with Rabobank are getting screwed. A cynical attempt to bring in more customers.
Lets not speculate on the movement of Interest rates. Just 5 months ago Ubank were clear leaders as the best "bargain". Now it depends on your situation.
so if you close your account with Rabo and re-open new account, will you get 6.4%? I have account with Raboplus but didn't put my money in their before since they offer lower rate. Which these kind of offer, you can just need to move your to the best offered account.
You dont need to do that. Comingg close to the end of the december period, move all your money to Ubank or who ever is offering the higher rates, then you rabo account will be near to zero, if they offer a new "teaser" rate then you move it back.
As for our uBank fanboys. They are a bank - how the hell do they have fanboys?
When people move then banks get the message, and the rates increase. How did ubank decide to increase their rate by this most generous .05%. Probably becuse they found money was leaving. At least it wasn't because people left their money there and they were just feeling generous.
@[Deactivated]: Exactly.. It is likely that money was getting taken out of UBank and deposited in to ING / competitor-X whom were offering better rates; UBank counters with a rate match to stem the flow of money being extracted.
wow huge .05%
but at least they are abiding by their rate assurance now beating ING 6.25%
Great deal, thanks
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This is not a bargain in my books given Rabo offer is higher. And even allowing for Rabo limit on time and only on higher balances.
Full disclosure: i am with Ubank but receiving the Rabo rate (due to high balance). 'Be gentle' this is my first negative LOL :)
"but receiving the Rabo rate" Did you negotiate this with uBank or is there a higher rate for bigger balance I missed seeing?
i called and negotiated "can you match rabo'….yes we can.
We had someone call, and they said they could, but only till October …
@SomeGuyOnOzB: foundit, same for me ie end of oct. when that occurs i will contact them again to see if they will match rabo, or if rates have increased anyway
Be gentle, this is my first negative
lol :)
All this talk of higher interest rates on savings accounts is bad news for me, higher savings rates, higher mortgage rates :(
Just my 2KB worth of unrelated rant
not completely accurate. Higher rates for savings is due to the higher wholesale funding costs that banks are experiencing. 50% (or so) of their funds come from offshore (wholesale funds) and they may pay a different rate from that imposed by the RBA. When the offshore cost is higher than local rates they have an incentive to raise the rate here.
Yes, it 'may' lead to higher mortgages but then only 1/3 of people pay a mortgage - 1/3 rent and 1/3 own outright (or thereabouts - probably out of date statistics but too lazy to find current ones). so higher savings rates benefit others.
Very much in agreement. There is far too much emphasis from the mainstream media on mortgage holders whenever interest rates rise. A large proportion of Australian society benefits from higher interest rates. It's the inconvenient truth that many people don't want to know.
I'm definitely moving to Robo, byebye Ubank.
Do RaboDirect offer a Visa Direct Debit card?
No.
It is a high interest online account.
OK, so it is link-only to ING Direct then (in my case). The funds transfer overnight, yes?
OK, so it is link-only to ING Direct then (in my case)
Yes, as are all other high interest accounts.
You wont find a high interest account with cashcard access due to the cost of giving you the card which is reflected in the lower interest paid on accounts with cashcard access.
The funds transfer overnight, yes?
Yes.
You can log into your rabo account and ask them to withdraw the money from your ING account.
If you do this before 5.30pm (Sydney time) the money will be transferred that night.
When you ask rabo to withdraw the money from your account you earn interest on the money transferred from that point in time. Even if it took 1 week (for example) for the money to move from your ING account to rabo, rabo will pay you interest on the money for that week.
You can also send money from your ING account and that will be subject to the ING transfer time cutoff.
My concern Rabo is a Dutch bank and NAB is local! How exposed is Rabo to the debt burdens in Europe. Now the Aussie Govt isnt garanteeing accounts someting to consider IMHO
Where do you think our banks (and now our government since they've wasted our surplus) borrow their money from to give to people to buy their overpriced houses?
From their website
"Rabobank is the world’s safest non-government owned bank. All deposits with RaboDirect are guaranteed by our ultimate parent Rabobank, an institution larger than the Commonwealth Bank, Westpac, National Australia Bank and ANZ. So your money is in safe hands."
Rabobank has a AAA credit rating which apparently means it is one of the top 10 safest banks in the world
http://www.rabobank.com/content/about_us/Keypoints/ratings/
How exposed is Rabo to the debt burdens in Europe
Being mainly an Agri bank I wouldn't expect them to be heavily impacted by the current European problems.
So the bank deposit guarantee is over now?
Finished at the end of march.
The bank deposit guarantee finishes in October 2011. It was designed to run for 3 years after the Lehmann Brothers collapse.
What anthony is referring to is the end of the guarantee for money market funds. Bank deposits are still covered until the above date.
Besides high rate at Rabo, it takes only two day for fund to be clear and they process your application very quickly. You will get a security device that looks like a calculator. In contrast to UBank which requires you to do direct debit one day before the transfer, you can do transaction until 5.30pm.
Though there is no person like Gerd around here, 6.40%pa is all I want.
I thought Gerd is not with Ubank anymore? well..
I'm not entirely sure how transferring funds work, but does the time it takes for you to transfer the funds and clear offset the bonus 0.14% available to you if you move your funds to rabo?
I.e. if it takes 1 day to transfer funds, then thats 1 day you're not earning interest hence moving it wouldn't make much sense
Can anyone clarify this point for me?
Yeah, this has worried me too. If you are always moving your money you are losing at least one day interest each time. I worked out that it would take me about 2 weeks to recover the interest lost to move from UBank to Rabo (obviously depends on the amount of money you move).
If UBank would just go to 6.4% it would all be nice and easy. :)
well when mine moved it left one day and was in the other account the next. But i also moved it last month when Ubank was still only giving. 5.89% vs rabos 6.4% so the effect really didnt bother me
Remember that no moving or not threatening to move = same old same old. They have no interest in you - pardon pun.
but don't forget after that is your earning, you don't just put your money there for just 1 or 2 weeks right.
I'm earning 6.50% with my Commonwealth Netbank Saver. Granted, its only till the end of August, and you had to have received a message from them offering you the special rate. They probably offered the special to me as I've had it sitting on $1 for the past year or so. If you already have a netbank account and didnt get an offer then maybe you can call and try to get it. Once its September I'm sending it all back to my ubank account, or may look into rabobank.
http://www.commbank.com.au/personal/accounts/netbanksaver/gr…
I had quite a bit of money in my Netbank Saver up until around April. I never got a special offer, and moved all my money to UBank. Haven't gotten any special offers from CBA yet. Oh well, I'm happy with UBank and probably won't move back to the Netbank Saver anyways. :)
Hmm. I never got such an offer from commonwealth bank. They have been good a matching when pushed, but I am getting a little sick of having to chase interest which they should be paying anyway. Might be time to switch to Ubank.
If you are switching (ie, don't already have a uSaver account) you'd be better off going to Rabo for a higher rate for the same (or less) effort.
I'm a uBank customer and I'm giving a "+" vote to Rabo. They have a better rate (till at least the end of the year!) and uBank aren't matching it as standard :-(
Fantastic!
Nice.
Technically it is:
PLEASE NOTE THE CURRENT INTEREST RATE IS: 6.26000000000000003% P.A.