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Money musings, financial commentary plus the rambling wit and
wisdom of the team from Mozo - Australia's money info zone

Mozo Rate Chasers Roundup

By Peter Marshall 13 October 2011 12:56pmbanking, competition, Home loans, Savings accounts, Term deposits, UncategorizedTag: > > > > >

Across the market rates are heading south as anticipation increases that the RBA will move to cut the official cash rate when it meets on the first Tuesday in November, exactly one year since it last felt the need to adjust rates. During September the Mozo rate chasing data team started seeing the first real indications of this change in mood.

In home loans, fixed rates led the way down. At the end of September, the average 1 year rate was 6.62%, 28 basis points below where it was in August, and the average 3 year fixed rate 43 basis points lower to 6.59% over the same period. All of the major banks reduced their fixed rates in September – the biggest 1 year fixed movement was Westpac slashing its rate by half a percent to 6.69%, and NAB cut its three year rate by 45 basis points to 6.64%.

The best 1 year fixed rate for home loans of $300,000 is Greater Building Society’s 5.89%, 40 basis points lower than a month ago (which was then the lowest 1 year fixed). loans.com.au took the title of cheapest variable rate loan in the market with its dream catcher home loan, dropping from 6.69% to 6.58%.

Term Deposit rates are also on their way down, with both the market average and the best 1 year rate down by about 15 basis points. At the end of September the average 1 year rate was 5.54% and the best in the market was Beirut Hellenic Bank at 6.10%. The major banks are pulling their rates back too.  ANZ had the biggest drop in any of the big four 1 year rates over the month, a 42 basis point reduction to 5.18% .

Competition in the online savings account area has been running hot for the last year, and over the 12 months to the end of September the average Savings Account rate increased by 35 basis points, 10 basis points more than last November’s RBA cash rate increase. Going against the trend, and perhaps a sign of things to come, Westpac cut the rate on its eSaver by 50 basis points to 4.80%.

The only positive online savings rate movement Mozo saw in September was RaboDirect increasing its bonus rate offer on its High Interest Savings Account by 0.01% so it could claim equal best rate in the market (with UBank and Virgin Money) at 6.51%.

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Money’s night of nights

By Mozo 27 September 2011 1:21pmbanking, competition, Mozo, People's Choice Awards

It’s that time again, and everybody’s talking about Mozo’s second annual People’s Choice Awards. Has it already been a year?

For those who live under a rock, the People’s Choice Awards are like parent-teacher night for bankers, with a dash of ‘financial Logies’ glamour. A massive 23,000 votes were cast (in the form of ratings from banking and insurance customers around Australia) to determine the best performing providers. Mozo’s election officials counted the beans and certified the results.

And the big winners?

The Greater Building Society achieved a record average rating of 9.2 out of 10, and scooped the Awards of Best Building Society, Best Home Loans and Best Savings Accounts.

ING Direct was voted Australia’s Best Bank for the second year running for its consistently competitive products, and also scooped Best Bank Accounts and Most Trusted Bank.

Victoria Teachers Credit Union was again voted Best Credit Union with a towering rating of 9.1 out of 10, and earned the extra credit of being the only provider not to receive a rating less than 5.

The top 18 providers all scored an average rating above Mozo’s ‘Fan’ score of ‘8 and above’, while the next 24 managed the ‘Fair’ score of ‘5 to 7’.

As for the losers, well, not everybody’s going to be happy with their report card. The Big Four as a group performed rather averagely, although there were winners and losers amongst them. Westpac scooped the awards for Best Term Deposits and Best Personal Loans,while the Commonwealth Bank copped a caning for its super sized home loan rate rise last November, being rated Australia’s worst home loan provider and worst Big 4 bank.

NAB marketed ‘break-ups’ and ‘asterisk-killing’ instead of mega rate rises, and won fans as a result. NAB’s average customer rating climbed to 7.1 out of 10, vaulting it to pole position as Australia’s favourite Big 4 bank.

And at the bottom of the pack? American Express gained more than a point over last year’s rating but still only managed 5.6 out of 10, while HomeSide, Citibank and GE Money each ended up with a ‘Fail’ rating of below 5 points.

The average rating for the whole class fell from 7.4 in 2010 to 7.2 in 2011, which suggests that less empty marketing hype and more real actions that benefit customers are needed in 2012.

For the full run-down of winners and losers, check out Mozo’s People Choice Awards page.

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It’s smart to be a rate tart

By Shaun Leung 17 August 2011 2:54pmbanking, Interest rates, Mozo, personal finance, Savings accounts, Term deposits, UncategorizedTag: > > > > >
Do you remember treasure hunting when you were young? You couldn’t care less at the small prizes and you would keep moving until you ended up at the BIG major prize. Similarly, why should you stick with a low interest savings account if there are bigger rewards to reap elsewhere? Be a rate tart and be promiscuous with the banks!

But where should you stash your hard-earned cash in this tumultuous economic climate?

We’ve come up with a nifty infographic which you can follow, leading you to the best savings accounts and term deposits based on your banking preferences. Good luck and go for gold on your treasure hunt!

Choose Your Own Savings Adventure

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Rate of Origin II

By Yash Murthy 26 May 2011 6:24pmbanking, competition, MozoTag: > > >
It’s a time where legends are born. A time where financial friends become foes. Where the true gladiators of the industry stand up to be counted. Welcome to Rate of Origin. Mate against mate. Rate against rate. 

For those unfamiliar with this annual interstate stoush between the Blues and Maroons, here’s the playing field; using ‘Mozo Reviews’, Australia’s only customer review database for financial products, I’ve collated all the overall customer ratings for all banks from both QLD and NSW over the past 12 months and averaged them into one score for each state.

Having lost last year’s Rate of Origin and with their rugby-league playing companions on the receiving end of another defeat last night, can NSW banks bring home some much-needed silverware?

Let’s take a look at the lineups. With 26 providers and 6000 reviews in their squad, NSW once again came in as favourites on paper, particularly with heavy-hitters like Westpac and St. George among the Cockroach ranks. Despite coming in as defending champions, Queensland once again rank as Underdogs, owing largely to their numerical inferiority. Despite only putting 2142 reviews and 12 providers on the field, last year’s shock result means you should underestimate the proud cane toads at your peril.

In a result sure to get the xxxx’s cracking north of the Tweed Heads, Queensland has overcome adversity to take home the coveted title again (sorry Blues fans). Led superbly by stalwarts Suncorp and Bank of Queensland, and driven by outstanding individual efforts from Queenslanders Credit Union and Heritage Building Society, the banana benders won with a score of 7.65, a 0.31 increase on last year’s winning effort.

NSW did manage to lift their game, an 0.18 improvement boosting them to a score of 7.09. Despite their loss, there were several valiant efforts in a losing side, most notably from Greater Building Society, Newcastle Permanent and Teachers Credit Union. Once again, the post-match autopsy points to the performance of the senior players, namely Westpac and St. George, who once again let their state down. Interestingly, if you remove those two from the equation, NSW’s overall rating skyrockets to 8.1, making the defeat a bitter pill to swallow for the rest of the Blues side.

With Origin done and dusted for another year, it’s time for both teams to start rebuilding their sides. I implore everyone to do their part and get behind your state and rate your bank – it’s the only way to give your team a chance at Origin glory in 2012!

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Eurovision, Mozo style!

By Yash Murthy 16 May 2011 5:10pmbanking, Mozo, UncategorizedTag: > > > > > > > >
If you’re unaware, Eurovision is an annual song contest involving national representatives from across Europe and this yearly combination of power ballads, bloc voting and unadulterated kitsch is one of the highlights of my year! 

In quite the upset, this year’s winner was Azerbaijan, a fact that a former Mozo staffer (who was actually born in the capital, Baku) no doubt relished. Nonetheless, I thought it’d be a good idea to showcase some of the European financial providers we host here on Mozo and see how they’ve been represented in the contest in recent times.

I’ve used ‘Mozo Reviews’, Australia’s only customer review database for financial products, to rank the top providers of European heritage. The ranking is based on the provider’s overall customer rating, a figure calculated as an average of all reviewers’ submissions in the ‘overall rating’ field.

So, without further ado, welcome to Mozo’s Eurovision spectacular!

1. The Netherlands (ING Direct & Rabodirect)

With overall ratings of 8.8 (ING Direct) and 8.5 (Rabodirect) respectively, these Dutch powerhouses are Mozo royalty, both taking home coveted People’s Choice Awards last year on the back of popular and innovative savings and term deposit products. The Dutch Eurovision entrants however, failed to live up to their impressive brethren, coming dead last in the second semi-final. Nonetheless, the singer does manage to sport a nifty Tony Montana-inspired number…

2.  Greece (Beirut Hellenic Bank)

I know Beirut Hellenic Bank originally hails from Cyprus, but as we already have the Bank of Cyprus to come and Hellenic as a term covers Greece, I thought we could blur the geographic boundaries a little – blocs aren’t limited to voting you know! Formerly known as Laiki Bank, Beirut Hellenic bank’s savings and term deposits have gleaned them an overall rating of 7.5 on our site, putting them in second place. As for Greece’s Eurovision number this year, I found it to be a pretty alien combination of genres that didn’t really grab me. I’m clearly no harbinger for European taste however, as Greece managed to come in at 7th overall. Nonetheless, have a squiz at last year’s excellent ‘Opa!’ instead, a personal fave of mine.

3. Germany (Allianz)

A customer rating of 7.4 for heavyweights Allianz has driven Germany into 3rd place on our countdown. Their 2011 Eurovision entry didn’t lack pedigree either – Germany actually came into this year’s Eurovision as reigning champions and hosts and for only the 3rd time in history last winner’s came back to defend her title. Her subdued number this year left her languishing in 10th place, so let’s take a look at the catchy ditty that won her the gong back in 2010.

4. Cyprus (Bank of Cyprus)

With a rating of 6.8, Bank of Cyprus comes in at number 4 this year, despite strong support for their term deposit and bank accounts. Cyprus’ Eurovision entrant was of similar stock, coming in at second-last in semi-final two. It’s well worth watching mind you, if only for the general gravity-defying and the big change-up at 1:17…

5. United Kingdom (Virgin Money)

The big shock comes from the UK. Surprisingly, Branson’s boy’s come in last on our list with a rating of 5.7. Despite Virgin Money’s customer-friendly image, customers seem to be savaging them across the board on both their savings and credit card offerings. It’s a lowly position that’s been shared by their Eurovision counterparts in recent times. The UK came in at 11th this year after coaxing former boy-band superstars, ‘Blue’, to front up. It’s an improvement on last year’s embarrassing last place, but still well short of expectations. Whinging about bloc-voting to no doubt ensue.

Finally, for those curious about the winner’s performance, here’s this year’s winner. Not my cup of tea, but hey, who am I to judge? This one’s for you Nijat.

Inspired to make your voice heard? Go on and review your bank here!

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Commonwealth Bank Shows Its True Colours

By Yash Murthy 09 May 2011 4:45pmATMs, Bank accounts, bankingTag: > >
According to its latest marketing campaign, Commonwealth Bank is “determined to be different”. All shot artistically in black and white, the TV ads feature mildly offbeat situations featuring the likes of a bulldog and a fainting housewife to highlight the bank’s superior customer service. However in light of recent events relating to its ATM glitch, is this shiny black and white veneer a mere facade? 

Let me set the scene. It’s just another sunny, Summer day when suddenly ATMs all over Sydney and Melbourne start spouting free money. A tech glitch has allowed Commonwealth Bank customers to significantly over-withdraw their accounts at Commonwealth ATMs. The glitch was fixed within a few hours, but in that time hundreds had profited from this fortuitous malfunction.

What does the bank that is “determined to be different” do?

For starters, Commonwealth issued a forceful statement, making it sound as though Sydney had all of a sudden morphed into a scene reminiscent of German hyperinflation post WW1, with hordes of desperate punters strolling around Sydney with cash-filled wheelbarrows in tow; “Commonwealth Bank ATMs were not issuing free cash – some customers deliberately and systematically set out to withdraw money that wasn’t theirs.”

The reality is that whilst there were ‘opportunists’ (who really think they can get away with over-withdrawing their own account in front of an ATM security camera?) who knowingly attempted to rip off Commbank, a significant portion of people affected seem to be misguided Commonwealth Bank customers unaware they were committing a crime.

Commbank has since come after them with real gusto. Letters were sent out to affected customers, asking them to make lump sum payments in a very short space of time and threatening them with court action. The ABC reportedly saw a letter to a welfare recipient threatening court action unless a debt of more than $700 was paid within 10 days.

What the Commonwealth seems to be forgetting is that these people aren’t just random street hoodlums – these people are their customers. You’d think in the current era of fierce banking competition (not to mention their current ad campaign) that would count for something. Is taking customers, some of whom are pensioners and welfare recipients, to court a good look for the Commonwealth Bank?

Either way, Ralph Norris and co. seem hellbent on getting the money back ASAP. In my opinion, if Commbank really are determined to be different, they need to reassess their approach. Does the recovery of a few thousand dollars now as opposed to over a few months outweigh the damage to the brand’s image?

That being said, maybe they have succeeded in being different after all. I mean, only Commonwealth could manage to come out of this whole mess looking like the bad guys even though they’re the original victims!

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Glenn Stevens : Behind the Rate Rises

By Yash Murthy 20 April 2011 4:32pmbanking, finance, RBATag: > > >
Labelled by Kochie as “the person that nobody knows and yet the bloke who controls their lives”, Reserve Bank of Australia (RBA) Governor Glenn Stevens is a bit of an enigma. He’s a public figure, yet unlike most celebs we really don’t know much about him. However, with him recently becoming the Australian Public Service’s first million-dollar man, I thought it’s about time we lifted the lid on the real Glenn Stevens. 

The Beginning

Glenn was born in Sydney in 1958 where, contrary to popular opinion, he in fact wasn’t born wearing a suit and tie. He went through school and on to the University of Sydney to pursue his passion for economics. However, whilst strolling the university’s corridors, he carried a deep dark secret inside – that he wasn’t “particularly good” at maths – a potentially career-ending roadblock for a budding economist. Nonetheless, showing the steely resolve that was to become his hallmark, Glenn overcame his mathematical demons and graduated out of Sydney Uni with first class honours in economics, going on to complete a Masters at the University of Western Ontario in Canada.

source: http://inside.org.au/

The Rise to Power

Punctuated only by a brief sabbatical to San Francisco in 1990, Glenn rose meteorically up the RBA ladder before becoming head of the economic analysis department in 1992. Glenn was now on the fast-track to stardom and when Governor Ian Macfarlane resigned in 2006, Stevens finally found himself in the hot seat. Glenn Stevens had cracked the big time.

Welcome to the Good Life

With inflation well under control and Australia’s economy in reasonable shape having seen the back of the GFC’s worst, Glenn Stevens’ stewardship at the helm of Australia’s monetary policy ship is looking pretty rosy. And with his new million dollars plus a year pay packet, so is his bank balance.

Dark Days and Redemption

But it hasn’t always been easy. When the RBA was forced to make tough interest rate decisions at the peak of the GFC, the media vultures pounced, one newspaper asking the question “Is this the most useless man in Australia?” in reference to Stevens. Despite his rigid facade, Stevens himself admits that the comments during those dark times had an effect – “I’m a human being; these things hurt”. His response was to open himself up to the public, an effort that has seen his popularity soar and public image restored.

The Man Behind the Governor

Fast cars, fast women and even faster drugs. Glenn Stevens may be a public figure with means, but those are three things he has most certainly steered clear of. In the words of the man himself, “this [is] not the classic case of the terribly wayward life and in the later years seeing the light”. Rather, Glenn’s life has always been underpinned by family and faith. He’s very active in his local church in Sylvania Waters, and he attributes a lot of his success to the grace of God. Equally important is his family – his wife is actually such a big fan of his that she collects bank notes with his signature on it!

Not that Glenn doesn’t have his passions. He enjoys listening to jazz and also plays guitar in his local church band. In his downtime he also has a penchant for the Bond movies, perhaps where he gets his sophisticated yet understated sense of style from. Along the same lines, perhaps his greatest extravagance is his penchant for flying – he’s a keen aviator and even owns a twin engine plane. Watch out John Travolta, there’s a new famous airman in town! Perhaps Stevens’ retirement in 2013 will see him taking Travolta’s spot in Qantas ads!

Keen to see more of Glenn’s handiwork? Check out our Reserve Bank page!

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Whichever way you slice it, there’s a bank account for you!

By Yash Murthy 14 April 2011 3:55pmBank accounts, banking, personal financeTag: > > > > > > > >

I was at the ATM getting some cash out to pay for my traditional Sunday night pizza when it dawned on me that in a lot of ways, the different types of bank accounts are very much akin to different types of pizza, with the account as a base and the features as toppings. With Sunday’s pizza now just another delicious faded memory, I’ve decided to fully explore this notion and in doing so, identify the best slices of bank account goodness out there.

Slice 1: The Margarita

Sometimes the best pizza is the simplest, and there’s no simpler pizza than an old fashioned margarita. In banking terms, this is the standard transaction account which gives you full access via EFTPOS, debit card and branch but no interest paid on the account. Not all margarita pizzas are created equal mind you and my slice of choice is NAB’s Classic banking account. It’s got no monthly fee, unlimited withdrawals from NAB and rediATMs as well as unlimited free access to your money via EFTPOS, internet banking, phone banking, branch and cheque book. There are similar accounts such as the Suncorp Everyday Basics account and the Citibank Plus Transaction account, but NAB has the widest distribution of ATMs and branches.

Slice 2: The Supreme

If you’re the type who wants it all, from pineapple to parmesan, nothing beats a Supreme pizza. In banking terms, you’ll be looking for a bank account that not only acts as a transaction account, but also pays high interest. My choice of supreme is the AMP eASYSaver (you’ll have to forgive their appalling capitalisation policy in naming the thing though!). You get 5.15% interest on every dollar, unlimited free access through internet, NAB and rediATMs, EFTPOS and an optional free chequebook.

There are other high-interest transaction accounts such as the BankWest Hero account, but AMP has the highest rate as well as no conditions with regards to balances or deposits. One thing to note however, is that this account has a $5 monthly fee, so you’ll need to hold a balance of at least $1,200 at all times to make the interest cover the fee.

Slice 3: The Gourmet

If you see yourself as a bit of a gourmand, there are niche accounts providing extra ATM benefits on top of being great everyday accounts as well.

The Moroccan Lamb and Tandoori Chicken banking equivalents come hot from the ovens of ING Direct and BankWest. ING DIRECT’s offering is the Orange Everyday account. There’s no monthly fee and unlimited free ATM withdrawals at any Australian ATM if you withdraw more than $200. On top of that there’s unlimited free EFTPOS transactions and ING Direct even pays you $0.50 if you withdraw more than $200 through EFTPOS. A few of those and you’ve got yourself some free garlic bread!

The second slice of choice is the BankWest Zero Transaction Account. Again, there’s no monthly fee, unlimited free ATM withdrawals at any ANZ, Commonwealth, NAB, Westpac or BankWest ATM as well as unlimited free EFTPOS transactions. The only catch is that you need to deposit $2000 a month into the account to maintain it, otherwise you’ll be switched over to another BankWest account.

The Crust: Final Thoughts

So next time you’re siting idly at home waiting for the delivery boy to arrive, instead of wallowing in your own hunger, use the time to see if there’s a bank account that’s more suited to your taste. It’s a slice of advice that could make things a lot easier for you.

Still hungry for information on bank accounts? Finish off that pizza and head over to Mozo Answers!

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Does the Commonwealth Bank score with the Goal Saver?

By Yash Murthy 16 March 2011 4:00pmbanking, Interest rates, Savings accountsTag: > > > >

If you haven’t seen the ads scattered all around town, the Commonwealth Bank has launched a new savings account. Initially dismissive due to the fact that ‘Big 4’ savings accounts rarely set the market alight, having to eyeball the ad at the bus shelter on my way to work every morning finally drove me to their website (don’t you hate it when the advertising wins?). A few clicks later and I was pleasantly surprised to find something worth writing about.

When it comes to savings accounts, there are two things that matter – rate and monthly fee. Commonwealth’s Goal Saver has managed to deliver on both fronts. For starters, there is no monthly service fee on the account. As for the interest rate, it’s an ongoing 6.0% – as long as you increase your balance by $200 a month and make no more than one withdrawal a month. Failure to meet the requirements and the rate drops down to a measly 3.0%.

The real headline here is the special rate conditions. Where before the market was focused on a ‘honeymoon rate’ that stayed high for the first few months then receded back to a lesser standard rate, over the past few months we’ve seen a trend emerging in favour of high ongoing rates with regular conditions. BankWest’s Regular Saver is currently at the head of the market with a rate of 7.0% as long as you make no withdrawals and deposit between $50 and $500 a month and UBank’s USaver offers 6.51% as long as you deposit $200 a month.

Whilst the Goal Saver rate does not quite hit the heights of BankWest and UBank, it certainly is a very good effort from a Big 4 bank and definitely warrants some consideration, particularly if you’re an existing Commonwealth customer who likes the convenience of all your banking in one place. As for the competition, the Goal Saver’s combination of rate and flexibility has really given Commonwealth the march on their rivals. Neither NAB or Westpac offer an ongoing rate anywhere near the 6% mark and whilst ANZ’s rewards saver does, it doesn’t have the flexibility of allowing any withdrawals.

It’s good to see banks starting to shift the goalposts towards rewarding their existing client base for an ongoing period as opposed to continuously luring new clients in with flashy headline rates then forgetting about them after four months. For so long banking advertisements have featured pledges to put the customer first only for the exact opposite to occur in practice. Perhaps this new offering from Commonwealth heralds the start of all that changing. And who knows? When all’s said and done, it might even stop me taking so long to notice those ads at the bus stop.

Got any more questions on savings accounts? Ask away on Mozo Answers!

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Does NAB need the Big Four relationship?

By Yash Murthy 24 February 2011 10:04ambanking, competitionTag: > > > > > > > > >

If you haven’t heard, apparently banking’s ‘Big 4’ is now the ‘Big 3’. Through a carefully planned and executed integrated campaign rooted in social media, NAB have decided to ‘break-up’ with ‘former’ cohorts Commonwealth, Westpac and ANZ.

On face value, it seems like a smart decision from NAB. Attempting to shed the image shared by the ‘Big Four’ could only help it’s stuttering financial performance and doing so by shedding fees and lowering rates is also a great step. However, could this move backfire in the long term?

By breaking up with their illustrious rivals, NAB’s losing its one key positive attributes – being better than the rest of the Big Four. Amongst their former brethren, over the past 18 months NAB had managed to position itself as the cheaper alternative with lower rates and less fees. Now having ‘broken up’, it opens them up to greater comparison with challenger brands, the likes of ING Direct, Aussie and RaboDirect, who have been doing this for a long time anyway. And this comparison isn’t pretty reading, particularly when looking along at the home loan battleground where the bulk of this banking war is being fought.

For example, NAB may have the lowest rate standard variable home loan out of the Big Four, but compare it to the rest of the market and they rank a lowly 36th out of the 58 different providers’ standard variable loans we have on our site. If you go on to take upfront and ongoing fees into account by sorting by comparison rate, they sink even further, plunging to 43rd on our list – though still above Commonwealth, Westpac and ANZ I might add.

Which leads to the wider problem with NAB’s strategy. I applaud its moves to cut fees and interest costs and I enjoy the fact that it’s trying to reignite competition in the consumer banking marketplace. The problem is, if everyone starts surveying their options and voting with their feet, will NAB be the winner? Who says an irate Commonwealth Bank customer is going to land up on NAB’s door when they can go a bit further down the road and get an even cheaper home loan? Moreover, what’s to stop NAB’s customers doing the same? Mutuals and Non-bank lenders on average still have far lower rates and fees.

If everyone starts looking for the best deal, NAB’s got a battle it can’t win. Not yet anyway. Breaking up may be hard to do, but only time will tell if it was the right thing to do.

Compare home loans at Mozo.

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