As 2012 is fast approaching and we are getting ready to sing in the New Year, we thought it was a great time to give you our picks of the best (and worst) banking products of 2011. The Mozo team has scoured the market with a fine-tooth comb, patiently reading product disclosure statements and comparing interest rates to bring you the results.
Some top stand-out products have been released throughout the year, with many bank accounts, home loans and credit cards receiving a big thumbs up. However, with every great product, a not so great product slips its way into the market. And for those that don’t make the grade, the Mozo team has our wooden spoon ready!
Best Bank Account
We love anything fee-free! Launched this year, the Citibank Plus Transaction Account ticks all the boxes for a great everyday banking account. The account has no monthly account fees, and fee free ATM withdrawals within the Citibank network in Australia which includes Citibank, Westpac and St.George ATMs. But the real game changer is that this bank account has no overseas ATM or purchase fees (these can be as high as $5 per transaction with some accounts) which makes this a great bank account for jetsetters and homebodies alike!
Some banking providers missed the fee-free memo this year! The Wooden Spoon Award goes to HSBC for its Savings Cheque Account. Not only are customers charged a $7.50 account fee (waived if the balance is always over $1000), the account only has six free ATM and Eftpos transactions a month, after which you are charged $2 for every other transaction. Ouch!
Best High Interest Savings Account
And the best savings account goes to… RaboDirect! Unlike other banks who only offer high interest rates for the first few months to new customers, RaboDirect’s High Interest Savings Account rewards savers with a competitive ongoing interest rate of 5.75% (with balances of up to $200,000). The savings account has other great features such as no minimum balances and no account fees.
The normally fantastic Bankwest has landed itself a Wooden Spoon Award for its Regular Saver Account. The savings account has a high interest rate of 6.50%, but the fine print reveals that you can only get this rate by depositing between $50 and $500 each month. What’s more, after a year the entire balance is swept to a nominated account so you have to start building your balance again!
Best Rewards Credit Card
This year our vote goes to the Qantas Amex Discovery Card for the best rewards credit card. It is one of the few cards that will earn you 1 Qantas Frequent Flyer point for every $1 you spend on the card and it has no limit on the number of points you can earn in a year. But best of all the Qantas Amex Discovery Card has no annual fee. When you consider most rewards cards have annual fees of around $150 this is a great saving which you can put towards your holiday spending.
Best Credit Card
Aussies love to travel and with the increased popularity of online shopping, finding the best credit card for you can make a huge difference to your finances. The 28 Degrees MasterCard has some great features for savvy travelers and shoppers which puts it at the top of our list:
– 100% free to use in Australia and overseas
– No overseas transaction or foreign currency conversion fees
-You can put credit in it before you start your trip.
Not to its usual great standard, Macquarie Bank increased its RateSaver and Gold credit cards by 0.25% after the RBA cut in November earning it our Wooden Spoon Award.
Loans.com.au and State Custodians are small players offering big savings in the home loan market! By not using brokers they’re able to offer competitive rates direct to borrowers – up to 0.75% below the average standard variable rate . You’ll have to spend time filling out the paperwork but the savings you’ll make will be worth it. For example, if your current home loan is with Westpac on the Rocket Repay Home Loan at 7.61% ($300,000 over 25 years), you can save over 70K by switching to these low rate providers.
The ‘fixed rate revert rort’ is a sneaky tactic by banks. They provide low fixed rates for the first few years and then revert to high variable rates once the fixed period is over. Citibank gets our wooden spoon for its fixed rate loans. For instance its 3 year fixed rate of 5.94% reverts to 7.77% for the rest of the loan.
Finding the right product in 2012
With so many products in the market, the search for the right credit card, bank account or home loan may seem daunting but Mozo has all the tools you need to tease out the “gotcha’s” and find the best deal! Head to Mozo now >>>