Considering buying a dog, cat or pony for Christmas? Paws a moment. Yes, we know the idea of a new fur baby may be hard to resist, but you need to be ready for the commitment you are making. And that’s not only in terms of time and love, but financially as well. In fact, a recent Mozo mystery shop of some of Australia’s most popular pets indicated that on average prices for fuzzy friends increased by 78% over three years. Meanwhile, the cost and set up of a pet (including expenses like bedding, vaccination and food) increased by 59% on average from 2017 to 2020. With a crowd-favourite breed, the Cavoodle, bumping up by a whopping 344%. Ultimately, this means some pets could end up costing you thousands of dollars, and that’s just in the first year of ownership.
Ordering their favourite take out, picking up a new pair of shoes, or organising a ride to get from A to B, it’s safe to say every millennial has done at least one of these with their smartphone. Although having the world at your fingertips is the ultimate dream, there is a degree of responsibility. From the moment you start using credit, Buy Now, Pay Later (BNPL) or when your name is on a utility bill, your money habits are shaping your credit score. While you might not think your credit score is a big deal now, it could be the difference between being approved or rejected for a home loan later on. “In 2020, we’ve seen the boom of Buy Now Pay Later services like Afterpay and Zip. But very few young Aussies know that these services can affect your chances of taking out a loan in the future,” said co-founder of fintech, Flux, Justin Joffe. “Imagine in 5 years your bank rejects your home loan application because of a missed repayment for that Mecca spending spree or Nintendo Switch that you bought on a whim.”According to Flux, more than one in two Aussies struggle with financial literacy, like understanding how to keep your credit health in the green. Flux is among some of the many tools out there helping younger Aussies tap into their financial freedom and ensure their relationship with money is a positive one.
Whether we’ve realised it or not, the COVID-19 pandemic has given the country a well needed financial reality check. And it looks like that feeling will be carried on in the new year. According to new research from UBank, Aussies are planning to prioritise financial security in 2021 over travel and unnecessary spending. The number one financial goal for more than half (42%) of those surveyed is saving for an emergency fund, followed by saving for retirement (27%). Getting debt free is another popular financial goal for 22% of respondents, while only 23% plan to save for an international holiday. But with 49% of people admitting that last minute costs and spending is the biggest financial hurdle, UBank Personal Finance Expert, Andre Botes says it might be best to go back to the basics to ensure financial success in 2021, from goal setting to drafting a budget. “By establishing your goals, you’ll have a clearer idea of why you’re creating a budget. If you know what you’re working towards, you’re more likely to follow through,” he said. “Writing down your goals and putting them in a visible place or changing your phone screen to an image of your dream are great ways to help visualise where you want to be in the future.”
As the saying goes, Christmas is the most wonderful time of the year, but new Mozo research has found that this year the festive season might also be a source of stress. Mozo found that 40% of Aussies are planning to spend less on Christmas gifts this year, one in four are stressed about the financial burden this time of year brings and 15% say they don't know how they will afford their Christmas expenses. “Christmas is a time to come together with family and friends and celebrate, however it can also be an expensive time of year. This Christmas two in five people are stressed and concerned about how they will be able to afford the holiday period,” said Mozo Director, Kirsty Lamont. But while some households may be feeling strapped for cash, others are faring somewhat better. Mozo found that almost half of those surveyed (48%) said they had managed to save a small amount for Christmas spending, while 15% of Aussies chose to make Christmas saving a priority this year. And with international travel ruled out until further notice, one in 10 used the money they would’ve spent on a holiday on Christmas shopping.
Insurance is a vital product, but despite its importance it is an area that Aussies sometimes avoid. Choosing the right insurance can be a complicated process, and once you've picked a policy It involves forking out cash just in case you find yourself, your belongings or your loved ones in an emergency situation.
There’s no denying that 2020 has been a whirlwind. From people hoarding toilet paper, lockdowns across the country to wild weather, there’s been a lot going on. So if you’ve missed the release of some of these new banking products, we don’t blame you. In fact, we are here to help! Here’s a roundup of some fun new financial products that dropped in 2020 that you should consider in 2021.
If 2018 was the year of the New Payments Platform and 2019 the year in which the first wave of neobanks to hit our shores, the ‘innovation identity’ of 2020 in the Australian banking sector seems a lot fuzzier.
From rates to tariffs and random fees, it’s no wonder energy bills have a reputation of being difficult to comprehend. Unfortunately, it often means many Aussies pick up a few myths on the way to understanding their energy bill. So, if one of your goals this year is to get on top of your personal finance, we’ve jotted down four energy bill myths to be aware of.
We love it when things are made easier, don't we? It's perhaps why the mantra for buy now, pay later is that it’s for anyone who values convenience. The idea of convenience is always attractive, especially when it means the initial cost of an item in your online cart is one-quarter of the price tag.Proponents of BNPL say that spreading your purchases in this way can be done without incurring any additional fees, too. It sounds too good to be true and for the Monopoly champs among us - those who can simultaneously budget and swallow up the row of green squares - buying now and paying later is surely very satisfying.But for the less skilled with a dependence on, shall we say, Chance, what do you need to know?Well, firstly BNPL has become the preferred payment option in many shops. You’ve probably seen various provider logos at the checkout of your favourites. This placement of brand names like Zip, Afterpay and Latitude seems to represent an evolutionary step in the retail experience. I think this, at least in part, is why the early adopters and Gen Z shoppers have jumped onboard - there is undoubtedly a coolness factor and currency to it all (pun intended). However, the Australian Securities and Investments Commissions (ASIC) probably isn’t all that concerned with what’s cool. To this end, ASIC’s recent review of the sector highlights that while buy now pay later has been embraced as easier, some consumers are also too easily missing payments.As a result, they’re paying late fees and are struggling to meet other financial commitments. The real point of contention around this, says ASIC, is that BNPL people have designed the offering as cost-free or low-cost, but perhaps haven't considered all outcomes. In short, some consumers aren’t up to the task of paying by instalment and don't fully weigh up their future financial position. So given the propensity for some to miss payments, this is becoming trickier to navigate. Still, BNPL continues to grow in popularity and so we need to think about its place in the landscape of financial products. Is it practical? What’s its future?
Australians are looking to spend more across retail, entertainment, motor vehicles and home buying, according to the November instalment of the Commonwealth Bank’s Household Spending Intentions series.
Despite initial fears of a property price crash, Australia’s housing market has stayed in robust shape this year, with signs it’s set to grow even stronger in 2021, especially in Melbourne. The latest report from property development platform Archistar found capital city markets have rebounded across the board since the easing of COVID-19 restrictions and the standout player has been Melbourne.The city recorded the sharpest surge of all in home buyer and seller demand as it emerged from its second lockdown last month. For example, Melbourne’s weekend auction clearance rates rose from 67% to 75% in November, while its newly reported home sales soared by a whopping 70% (compared to Sydney’s 7.5%), says Archistar. Meanwhile on the pricing front, Melbourne saw a 0.7% increase over November - a considerable feat, given that only a month prior, it was the only capital city to record a drop, according to Corelogic data.
Not too into gift giving this year? Well it turns out you’re not alone, as one in ten Australians said they don’t want a present at all this Christmas, according to Gumtree’s latest report.
Whether you’re straight up addicted or only use it when you have to, most of us have made one online purchase this year. But according to new research by MyState Bank, we might have added a few negative money habits to our virtual cart. The research found that bad online shopping habits are costing the average Aussies more than $400 a year! Some of the bad habits included buying more items to hit the ‘free shipping’ limit (48%), not returning an item that wasn’t right or didn’t fit (24%) or using online shopping as a way to kill time and boredom (23%). Other silly shopping habits included purchasing unnecessary items because they were on sale (21%) and storing their credit card details in their favourite websites to allow for faster and easier future purchases (17%). “With the online sales season in full swing, our research uncovered Australians are engaging in online shopping habits which are likely burning a hole in their pockets. We calculated costly habits are costing online shoppers an average of $424 each year,” said MyState Bank general manager, customer experience Heather McGovern. Interestingly, 36% of Aussies believe that they spend more money shopping online than they do when shopping in physical stores, while 65% said the time spent shopping online since the COVID-19 pandemic began has increased. “While many Australians enjoy the convenience of online shopping, the danger is that there aren’t many barriers to spending money. Compared to shopping in a store, consumers don’t have to put as much effort or thought into adding things to their cart.”
Xinja has today announced it will be returning its Authority Deposit-Taking Institution (ADI) licence and will be discontinuing its Bank and Stash account. According to the neobank, the decision to ‘close’ and leave the banking industry is so that it can focus on its other areas of interest, like its US share trading product, Dabble.
They say you learn something new everyday, but according to new research from Rabobank many Aussies spent the year picking up some new money habits. Around 31% of Aussies made the effort to regularly save each month of this year, while a massive 90% say they now have a savings buffer, according to the Rabobank Financial Health Barometer shows.Aussies that were regularly saving also said they stashed an average of $978 a month and that their buffer could last four months.However, for some households, 2020 was a year to cut back. According to Rabobank, 3.7 million Aussie households experienced a decrease in income due to the COVID-19 pandemic. This prompted many to assess their spending across a range of areas, like clothing (40%), entertainment (44%), food (23%) and even delaying larger purchases (23%). “Many of us have had to make changes to our spending and saving habits this year as we’ve grappled with the impact of the pandemic. But as we start to focus on a new year, it’s worthwhile to review the strategies we’ve put in place to ensure they are aligned to not only meeting short term needs but longer term goals also,” said Glenn Wealands, head of client experience, Rabobank Australia.
Ecommerce has been this year’s big success story for Australian businesses, with many seeing their sales bounce back thanks to record-high numbers of people shopping online.Yet, as promising as the domestic eCommerce market looks right now, new data suggests your business could make even greater gains by going international.International money transfer (IMT) specialist OFX reported that revenue for its online clients selling overseas jumped a massive 41% last month, compared to a year ago.Their total volume of goods sold was also significantly higher this November than the last - up 51% from a year ago. OFX’s strategic partnerships director for eCommerce, Edward Wiley says these businesses have mainly benefitted from a COVID-induced growth in online sales, not just here in Australia but in other larger countries like the US too. For comparison, Australia’s eCommerce market is forecasted to hit US$27.2 billion by the year’s end, whereas the US’s is projected to reach a much higher US$431.6 billion, according to analytics company Statisca. “Australian businesses are doing really well but some of them might be missing out on this once-in-a-lifetime opportunity to expand internationally and catch that kind of [global] market share while everyone is moving to buying online,” Wiley says.
From toilet paper alternatives to rare diamonds, 2020 sure has inspired some interesting purchases. With most of the year spent tucked away at home, many turned to online shopping for some light relief. While some merely window scrolled, others laid out money for some pretty pricey and sometimes unusual items.
But if you’ve become a proud pet parent this holiday season, you might have your ears pricked for pet care advice. So, we thought we’d take you on a jolly journey exploring some of the things you may have to think about when taking out a pet insurance policy.
We know this time of year can be tough financially, but the thing is Christmas doesn’t have to cost the earth. In fact, we’ve come up with a few tips to help you spend less on Christmas and keep your finances healthy over the holidays.
Many Australians are focussing on reducing household costs right now, and saving on interest repayments by switching to a better value home is a great place to start. Since Covid-19 hit our shores, the number of Aussies refinancing their mortgage has spiked as rival lenders cut rates to woo borrowers from the major banks, with some genuinely big savings now available for those who are prepared to shop around.
Despite a global pandemic and the country’s first recession in 30 years, Australia’s housing market has withstood almost everything 2020 has thrown at it, making all those early forecasts of 10, 20 and even 30 per cent price drops seem embarrassingly off the mark.Experts are now fairly confident that we’ve passed the bottom of this property cycle. After values fell 2.1 per cent between April and October, property research firm CoreLogic recorded an 0.8 per cent increase in November.Tim Lawless, head of research at CoreLogic says that if this run of price growth continues, “we could see a recovery from the COVID downturn as early as January or February next year.”The major banks have also upgraded their forecasts. NAB now expects prices to increase by 5 per cent over 2021 and 6 per cent over 2022, while Westpac predicts double digit growth in the capital cities over the next two years.So how exactly has the housing market remained so strong? We consider some of the biggest reasons below, and explore what the experts are saying we can expect from the world of property in 2021.
Has 2020 shaken up the way you spend? If the answer is yes, it may be time to think about switching your credit card for the year ahead. “There’s no doubt that, for many Aussies, 2020 has changed the way we’re spending our money, so naturally now could be the time to reassess something like a credit card.” Mozo Director, Kirsty Lamont said. “Look at things like the interest rate and fees, as well as the value of your current rewards program. If your spending habits have changed, by switching cards you could save yourself forking out too much in interest repayments or pesky annual fees which you can actually avoid.”
At a time when online shopping is surging and eCommerce has become an undeniably crucial avenue for reaching customers, two companies have joined forces to help Australian small businesses pay for their social media advertising with Buy Now Pay Later (BNPL). BNPL service Zip today announced it has teamed up with social media giant Facebook to allow small to medium enterprises (SMEs) to use Zip Business when funding their marketing campaigns on the platform. Zip Business gives SMEs access to unsecured business loans of up to $500k, with interest only charged on the amount you end up using (not the total amount you’re approved for). According to Zip’s co-founder Peter Gray, the partnership is part of efforts to address cashflow issues that might hinder many small businesses from taking their digital operations to the next level. “92% of small businesses believe they would have generated more revenue in the previous year if their cashflow was better,” he said. “Partnering with Facebook is an important step not only in the expansion of Zip Business, but in helping small business owners to capitalise on the recent growth in the eCommerce sector and to get ahead.“With 14 million Australians using Facebook every day, the social network is an increasingly important advertising channel for small businesses.” The Zip-Facebook service is still in testing, with the roll-out to start initially with Facebook’s prepaid advertisers. This marks the second big collaboration for Zip Business, which launched back in August to offer lines of credit to SMEs on eBay.
For many 2020 has been the year of discovering and embracing new hobbies, from cooking up a storm to learning how to sew. Inside homes across the world, people have been doing workouts, practising musical instruments and, of course, baking banana bread.
With less than three weeks to go until we welcome in the new year, many Aussies may have already begun thinking about the goals they want to achieve in 2021. And for some, that can mean giving their home an energy efficiency upgrade. According to CSIRO building simulation research lead, Anthony Wright, the average Aussie household is rated only 2.2 stars out of 10 for energy efficiency. However, if the average Sydney or Melbourne home were to bump that figure up to a 4.9 stars, they could save up to $480 a year on their energy bills.When it comes to improving energy efficiency around the house, you might be surprised to learn that substantial savings can be made just by making small improvements. For instance, draught sealing and filling gaps or cracks around windows and doors are a great place to start. Other options include updating energy guzzling appliances for energy saving ones or installing external blinds to block out heat. But for the Aussies who don’t mind taking things to the next level, upgrading hot water systems, air conditioning and other appliances could deliver annual savings of $900, says Wright. “It’s also worthwhile getting an energy rate involved early,” Wright said in a recent interview with The New Daily. “It can seem like it costs, but it will pay back in comfort and energy bill savings in spades over time, as they can do a before-and-after rating, and also provide consultation on tweaking your renovation as you go.”
Chances are we’ve all picked up a new hobby during the pandemic, whether it’s sewing or baking. For a big portion of Australians though, their newest obsession is with home improvement projects. New research from retailer Amart Furniture found over a third of Aussies used the extra time spent indoors to update and restyle their homes. But rather than knocking down parts of the living room or bedroom for large-scale renovations, 58% of respondents said they opted to buy new furniture instead. In fact, furniture sales have been steadily increasing since the start of COVID-19. Couches (30%), chairs (28%), coffee tables (28%), desks (27%), and mattresses (24%) top the list as the five most popular items Australians purchased over this period, according to Amart Furniture. “So many of us can relate to making changes to the way we live in our homes at the moment, whether that’s creating a new office space from scratch or turning our living rooms into makeshift restaurants, cinemas and gyms,” Amart Furniture’s general manager of buying, Steve Norman said.
They say the key to keeping your Christmas shopping on track is to start early. But when it comes to keeping your spending in check, new Mozo research has found that taking the time to compare deals might be just as important. Following a Christmas mystery shop of twelve popular gifts, Mozo found there was an average 42% price difference between retailers. The minimum price difference on all items surveyed was 20%. For instance, a popular Jean Paul Gautier 100ml perfume at its most expensive was $169 and $69 at its cheapest - a price difference of an impressive 141%.Another standout find was the Smeg coffee machine, which clocked in at $549 at its dearest and $449 at its cheapest, recording a price difference of 22%. “Mozo’s festive mystery shoppers found there are major savings to be made if you do your research this Christmas and shop around,” said Mozo Director, Kirsty Lamont, “While this can be a daunting task, especially if you’re heading into stores, a quick search online could you see you pocketing hundreds of dollars, as retailers’ pricing varied across a wide range of popular gifts.”
We’re just two weeks out from Christmas which means peak present buying season is upon us, but instead of only watching cash leave your wallet over the holiday period, could you organise yourself a festive bonus as well?
Whether you’re still in uniform, studying at college or in between years at uni, the summer holiday stretch can be a great time to get some work experience. Of course, if you are lucky enough to land a job over the next few months, you’ll want to make sure you use your earnings wisely.
Summer is upon us and with it storm season. The Bureau of Meteorology has warned that this December through to February next year will be wetter on average for most of Australia.
With Christmas almost two weeks away, many shoppers may be scrambling and doing whatever they can to get their gift shopping done in time, like using Buy Now Pay Later (BNPL) services. Although these services can ease the financial burden of Christmas shopping by offering interest-free installments, Mozo has reminded Aussies to consider the potential traps of BNPL that can come from overspending or missing repayments. “It’s important to keep track of your spending and make sure you can afford your purchases. It can be easy to make multiple purchases on the platforms, leaving you with a calendar full of small repayments that can all add up,” said Mozo Director, Kirsty Lamont. “For example, if you used Buy Now Pay Later to buy $800 worth of Christmas presents in December with your last purchase on Christmas Eve, you could be paying off your presents until 4th February 2021.” Following an analysis of some of the most popular BNPL services in Australia, Mozo found that late fees can range between $3 to $10 per repayment. Many also charge extra penalties of up to $19.95 for late payments that exceed seven days.
From businesses being forced to close to households being kept apart from loved ones, 2020 was not the year anyone anticipated. And while it might be easier to write this year off for good, there are some positive things in the finance world that made 2020 that bit more bearable. Since this year felt like an eternity, we’ll forgive you for letting some of these favourite moments slip your mind. So without further delay, check out our top six best financial moments in 2020!
The year of 2020 has really shaken up the work-lifestyle mix. Many Australians transitioned from office spaces to living room work stations, alongside a raft of other restrictions and changes to workflow (we’re looking at you, Slack calls and Google Hangouts).
Fourteen months after being directed by Treasurer Josh Frydenberg to conduct an inquiry into home loan pricing, the Australian Competition and Consumer Commission (ACCC) has released its final report in which it urges Aussie homeowners to review their home loan rates to potentially save thousands of dollars.
What a year 2020 has been for Australia’s property market. As COVID-19 left no corner of life untouched, we saw home loan interest rates fall to new historic lows, clearance rates in many of our capital cities dip, and housing prices follow a similar downward trend. But the property market has proven surprisingly resilient. According to the latest CoreLogic figures, November is the second consecutive month that dwelling values have risen, following a pandemic-induced drop of 2.1% between April and September.CoreLogic said the recovery has been largely propped up by monetary policy and fiscal policy support, as well as growing consumer confidence and signs that the economy is bouncing back. So amid all the ups and downs, just how much have properties across Australia actually been costing homebuyers? On the one hand, some of our wealthiest made headlines for spending exorbitant amounts on houses located in Australia’s most exclusive postcodes, while on the other hand, there was a real appetite for regional and rural bargains. So to give you a snapshot of properties at both ends, we’ve compiled a list of some of the cheapest and most expensive homes that buyers snapped up over 2020:
No matter how different Aussie families are, there’s always that one person you’re stumped on what to give for Christmas … until now. Payment app company, Beem It has brought in a new feature, which allows users to purchase and send personalised gift cards to friends and family. In order to create, purchase and send a digital gift card, Beem It users will need to download the app and create an account with a debit or credit card. From there, they can browse from more than 50 brands and select the right pick before putting their own personal spin on it. Recipients don’t need to be Beem It customers to use the gift card. “We wanted to challenge the view that a digital gift card is the less personal option as we believe the gift of choice is actually quite a thoughtful one,” said head of operations at Beem It, Jason Backhouse. “To do so, we’ve built the feature with the gifting experience at its core, from allowing users to select from a range of animations reflective of their personal taste. With the digital unwrapping and interactive scratch to reveal functionality, we wanted the gifting experience to feel unique and memorable.”
The refusal of the big banks to pass through the latest RBA cut to variable borrowers has sparked a frenzy of home loan comparison and switching activity, as borrowers race to take advantage of the new rock bottom rates on offer from smaller lenders.
The Australian dollar yesterday broke past 74 US cents and hit its highest level since August 2018.US dollar weakness and an uptick in domestic economic activity have helped to prop up the Aussie dollar and right now the AUD is trading at around 74.1 US cents. This comes after Wednesday’s release of Australian Bureau of Statistics data which indicated Australia’s economy is bouncing back. Our gross domestic product (GDP) in the September quarter is up 3.3%, thanks to COVID-19 restrictions easing across most of the country (although GDP is still 3.8% lower than a year ago). This sentiment of cautious optimism was also reflected in Reserve Bank Governor Phillp Lowe’s statements on Tuesday, following the latest RBA meeting. “The positive news on vaccines has boosted equity markets, lowered risk premiums and supported further increases in some commodity prices. The improvement in risk sentiment has also been associated with a depreciation of the US dollar and an appreciation of the Australian dollar,” he said. “In Australia, the economic recovery is under way and recent data have generally been better than expected. This is good news, but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support.” A lower Aussie dollar makes Australian exports cheaper and more attractive to overseas buyers, so a stronger AUD isn’t ideal for improving the GDP. But the strong Aussie dollar right now is beneficial for anyone looking to transfer money overseas from Australia to the US. It means the currency market has moved in your favour and you can potentially get more USDs for the same amount of AUDs sent. Remember though, that even if the market is looking favourable for you, different bank and foreign exchange (FX) specialist providers will still charge their own margins and fees on top. So it’s a good idea to shop around regardless. That way you can find the cheapest deals for your money transfer. Compare a few competitive exchange rates in the table below or jump over to our international money transfers hub for even more options. Not sending money overseas just yet? Look out for a feature known as a forward contract (offered by many FX specialists). This tool allows you to secure today’s rate for a transfer in the future, sometimes up to two years in advance.
As summer begins competition for borrowers is running hot, especially with lenders dropping home loan interest rates left, right and centre following last month’s Reserve Bank rate cut.
Bit of a sucker for credit card bonus points? Well you’ve come to the right place. With Christmas around the corner, it’s likely your spending is going to increase, so now could be the perfect time to capitalise on a bonus points offer. And if Qantas Frequent Flyer is the program for you, there are plenty of options out there. At the moment, there are over 60 credit cards on the Mozo database that have bonus points offers attached. In most cases, these offers require a new cardholder to spend a certain amount in a selected period of time in order to receive a lump sum of rewards points. Of those credit cards, 28 have Qantas Frequent Flyer bonus offers: ranging from 15,000 points up to a generous 150,000. Check out some of these offers below!
There’s been a substantial home loan rate shift in 2020 as interest rates have continued to fall and fixed home loans have emerged as the new low rate option for borrowers.
So you’ve splurged your summer holiday fund on a snazzy weekend ride. You may not be able to fly off overseas this year, but at least you can take your new super sleek sports car or jazzy jetski out for a spin, right?
As anyone who’s big on secret santas and festive dinners knows, Christmas celebrations don’t come cheap. But the good news is that tightening your budget this December doesn’t have to come at the expense of nice gifts. Whether you’re doing your shopping online or in-store, here are six tactics to help you cut the cost of Christmas and keep your savings account intact.
Pensioners are continuing to draw the short straw when it comes to deposits, according to new Mozo analysis. Mozo found that on a balance of $53,000, the average pensioner account rate now sits at a mere 0.62%, which is a whopping 163 basis points below the deeming rate of 2.25%. “Although the government assumes pensioners are getting at least 2.25% annual return on every dollar over $53,000 in savings or investments to determine their pension income, the numbers tell a different story,” said Mozo Director, Kirsty Lamont.Pensioners who have cash stashed away with the big four banks aren’t winning either, as Mozo’s analysis shows that the average return ranges from 0.21% to 0.35%. “Times have never been tougher for pensioners when it comes to generating an income from their savings, so following the third official rate cut this year it’s time the government did the right thing by older Australians and reduced the deeming rate,” said Lamont. AMP and Bendigo Bank were the providers offering the lowest pensioner rate in the Mozo database, while ANZ’s 9-month (0.15%) and 12-month (0.20%) term deposit rate are the lowest rates for those terms for any bank recorded in Mozo’s database. “There is not a lot of good news around for those in the market for a term deposit, with 86 deposit-takers slashing rates in the past two months and more cuts likely before Christmas as the latest official cash rate continues to wash through the market,” Lamont explained. BankVic currently has the highest 12-month term deposit rate at 1.05%, while the average 12 month rate sits at 0.64%. Mozo calculated that a $25,000 investment with the BankVic 12-month term deposit would see you earn $263 in interest, compared to $160 on the average term deposit rate.
RBA governor Philip Lowe has indicated that now is a good time for first home buyers to get a foot on the property ladder, saying that current conditions have titled the market decidedly in their favour.Speaking at a parliamentary panel in Canberra on Wednesday, Lowe was asked if young Australians should take advantage of the current interest rate environment and consider purchasing their first home.While he was reluctant to provide any sort of financial advice, the RBA boss admitted that “it's actually a good time, if you're a first home buyer, to buy the property you've wanted.”"And many first home buyers must agree with me because demand from first home owners at the moment is very strong,” he said.Along with record low rates, there are several government programs designed to help young Australians, including the First Home Owners Grant, which subsidises the purchase or construction of new homes, and the First Home Loan Deposit Scheme.Lowe brushed aside concerns that an influx of buyers would send prices soaring, arguing that growth in the market will be restrained by international border closures and weak population growth.He also weighed in on the federal government’s proposal to revise responsible lending obligations, saying it’s “the right direction to be heading in.”The changes hope to free up the flow of credit by allowing banks to take applicants at their word when disclosing income and spending, rather than relying on their own verification processes.
Qantas Insurance has today announced that it will be expanding its product portfolio with Qantas Home Insurance. And yes you guessed it, there are Qantas Points on the table with this new offering. As much as 40,000 to be precise.
Most Australians aren’t getting much joy from their savings accounts right now. In our snapshot of December’s savings interest rate landscape, we saw the average ongoing savings rate in Mozo’s database plunge to less than half a percent.But there is some hope and it’s held in the hot little hands of young savers. Specialised savings accounts for kids and young adults are well and truly leading the way, with interest rates as high as 3.00%. If they’ve been taught well, anyone who sits in the relevant age bracket should get saving while the variable savings rates are good. Make sure you check the fine print of the market-leading accounts below for any conditions you’ll need to meet to earn bonus interest.
When Australia officially entered lockdown in March, thousands of people and small businesses were left stranded with a reduced income or forced to shut down, struggling to keep up with regular expenses, like their energy bill. And according to the Australian Energy Regulator’s (AER) Annual Retail Markets Report, those households and small businesses still remain in ‘energy debt’ to their retailers. The report found a sharp increase in energy debt amongst small businesses, with the total jumping from $35 million in March 2020 to $45 million in June 2020. For residential customers, long-term electricity debt reportedly increased by 21% between 31 March and 2 November to $124.5 million. Almost 60,000 households also took advantage of their retailers' offer to defer energy bills for a time, providing some breathing room. “If you are struggling to pay your bills, talk to your retailer about your debt – even if you can’t afford to pay anything right now,” said AER chair, Clare Savage. “You won’t be disconnected, and your retailer will work with you to set up a plan and help you start paying off your debt.”And it looks like most Aussies were satisfied with their retailer’s support, as there were 29% fewer complaints made to retailers and 26% fewer complaints to the ombudsman since the 2018/19 financial year.
CommBank has officially launched its brand new interest-free credit card Neo, just three months after its announcement. Customers who sign up for a Neo interest-free credit card will have their pick of three credit limits and are assigned a monthly fee based on the limit they have selected. The credit limits and fees are:
For many Aussies, Christmas is the time of year to indulge, whether that’s having a festive drink or an extra slice of cake. But for some, it can often mean spending more than intended on gifts, groceries and more. And rather than just starting the new year with tighter jeans, you’re instead left with a large amount of credit card debt. So if you’re planning to put some or all of Christmas on your credit card this year, having a tight repayment plan in place for the new year is essential. To get you started the right way, we’re sharing two of our top plastic picks that can help keep costs low this Christmas.
International money transfer fintech, TransferWise has hit a major milestone, as it becomes the first company in over ten years to receive a restricted banking licence as a purchased payment facility (PPF) provider. For context, gift cards, loyalty cards and travel cards are all examples of PPFs, as they involve the provider making payments to others on behalf of the user. The Australian Prudential Regulation Authority’s decision to grant TransferWise a PPF licence this week means it’s now considered a ‘limited authorised deposit-taking institution’ (ADI). So what’s the significance of this new label? Simply put, it gives TransferWise direct access to Australia’s real-time payments system, known as the New Payments Platform.Currently, direct access to the New Payments Platform is only available to ADIs or banks, so fintechs without ADI status still have to pay third-party intermediaries to gain access.But thanks to APRA’s decision to open up that exclusivity to TransferWise, the fintech will no longer need to rely on those intermediaries, bringing down their wholesale banking costs.TransferWise says that as a result, it’s yet another step closer to providing instant international money transfers to Australians at a lower cost. “By becoming independent and cutting out the middleman, we’ll be able to save our customers even more money and time in the process,” TransferWise Australia’s country manager, Tim Cameron said. As a point of comparison, after being granted the PPF-equivalent licence in the UK, TransferWise said it was able to make transfers to and from the UK in under 20 seconds and cut its pricing by nearly 30%. To date, PayPal is the only other player that holds a PPF licence. However, this is somewhat a bittersweet win for TransferWise, as the PPF licence category will soon be updated with a Stored-value Facility regime to account for the rise of digital wallet payments. It’s not yet clear whether the new regime will cover direct access to the New Payments Platform.
In November another Reserve Bank cash rate cut occured, and since then Mozo has counted an astounding 785 reductions to term deposits. The average cut was 13.7 basis points and the average rate for a one-year term fell 11 basis points to 0.65% p.a.*
The Reserve Bank has opted to keep official interest rates unchanged at its latest policy meeting this afternoon. The cash rate currently sits at a record low 0.1%, where it has remained since early November."In Australia, the economic recovery is under way and recent data have generally been better than expected. This is good news, but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support," said RBA Governor Philip Lowe in his post-meeting statement."In the RBA's central scenario, it will not be until the end of 2021 that the level of GDP reaches the level attained at the end of 2019. In the central scenario, GDP is expected to grow by around 5 per cent next year and 4 per cent over 2022."The central bank announced a number of changes to key policy rates last month, including a 15 basis point reduction to the cash rate, three-year bond yield target, and term funding facility rate.It also launched a quantitative easing program aimed at purchasing $100 billion worth of bonds with maturities of around five to ten years over a period of six months.So far, the RBA has bought $19 billion worth of government bonds and a further $5 billion of Australian government securities in support of the 3-year yield target. Its balance sheet has increased by around $130 billion this year.Lowe said the November package had already delivered substantial aid to the economy, and is helping to lower financing costs for borrowers and keep the exchange rate low. He also cautioned the government against withdrawing its fiscal stimulus, saying that while the economic outlook has picked up on news of a coronavirus vaccine, ongoing support will be necessary until it is widely available.
The latest Reserve Bank cut has, unsurprisingly, served as the catalyst for another round of widespread changes to home loan interest rates, with a majority of lenders having reduced rates over the past month.
Ladies and gentleman, we’ve officially reached the final chapter of 2020. Who would’ve thought? After a year that’s truly been like no other, I’d like to congratulate you all for seeing it through to the end.
From 1 December, home and motor vehicle insurer Youi will be offering New South Wales drivers compulsory third party (CTP) insurance, otherwise known as green slip insurance.
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