Top ways to use your tax return this year
Monika Gudova
09 Aug 2018
Putting this year's tax return in your savings account seems like a no-brainer right? Well, with the average savings account offering up a return of just 1.79% p.a., Mozo research has shown there are some much better options for money savvy Aussies.
“We found depositing the average tax refund of $2,602 in a savings account with this 1.79% rate delivers a return of just $48 in interest a year- not much better than if you were to put it under your mattress,” said Mozo Data Manager, Peter Marshall.
So what should you do with your tax return windfall? We’ve broken down a couple of the best ways to use your tax return so you can watch your hard-earned money grow this year.
Make an extra repayment on your home loan
One way Aussies can save is by putting their tax refund towards their mortgage. By funnelling your tax refund into your mortgage you could save $230 in interest over the next year*. Over a 30 year loan, this would wind up saving you $6,895 in interest.
“Nearly one million Australian mortgage holders are now experiencing mortgage stress across the country,” said Marshall^.
“Using your tax refund as an extra repayment is a great strategy to build up a bit of a buffer within your mortgage when interest rates inevitably rise.”
Pay off credit card debt
With ASIC findings suggesting that as many as one in five Aussie cardholders are struggling with credit card debt, paying off a lingering balance with your tax return could be a way to get out of deep water.
Using your tax refund to pay the average credit card debt of $4,400 off a card collecting interest at 17.06%* could save you up to $344 over the year, helping you clear your card debt up to seven months earlier.
“For debt-holders receiving a tax refund this year, this could be the kick start they need to finally get their finances from the red into the black,” said Marshall.
If you’re tired of high interest rates and accumulating debt, check out some great deals to help you save below. Or, if you’d like to compare more options, head over to our credit card comparison tool.
*Calculations based on the average tax refund from the Australian Taxation Office Annual Report 2016/17. Annual credit card savings calculated are based on the average purchase rate of 17.06% and average credit card debt. Annual home loan repayment savings are based on an average $300,000, owner-occupier home loan. ^From Digital Finance Analytics: https://digitalfinanceanalytics...
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Rates updated daily. Advertiser disclosure.
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Great Southern Bank Low Rate Credit Card
0% p.a. for 25 months and then 21.74% p.a.
11.99% p.a.
$49 $0 in the first year
0% balance transfer rate for 20 months and up to 55 interest free days. No annual fee for the first year and $49 after. Mozo Experts Choice Balance Transfer Platinum Credit Card Winner 2020^
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11.99% p.a.
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0% p.a. for 25 months and then 21.74% p.a.
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21.74% p.a.
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55
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0.0
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3.40%
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$49 $0 in the first year
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$12.50
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2.00%, Min $3.50
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Apply By 04 October 2021
Kogan Money Black Card
0% p.a. for 12 months and then 21.74% p.a.
20.99% p.a.
$0
Kogan Money Black Card has no annual fee and no cap or expiry date on points. It comes with a 55 interest free days on purchases and a 0% balance transfer rate for the first 12 months. Earn up to $400 in Kogan.com Credit, $50 Credit on first eligible spend in 30 days and $350 Credit when you spend $1,500 on eligible purchases in 90 days from card approval.
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20.99% p.a.
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0% p.a. for 12 months and then 21.74% p.a.
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21.74% p.a.
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55
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3.40%
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$0
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$30.00
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3.50%, min $5.00
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Apply By 31 October 2021
Bendigo Bank Low Rate Credit Card
0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
0% p.a. for 12 months then 11.99% p.a.
$45
0% p.a. on purchases for up to 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for up to 12 months. Low annual fee of $45 and no fees for additional cardholders.
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0% p.a. for 12 months then 11.99% p.a.
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0% p.a. for 12 months
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0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
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13.99% p.a.
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55
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3.00%
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$45
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$15.00
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0.50%, Min $3.25
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Westpac Low Rate
0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
13.74% p.a.
$59 $0 in the first year
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13.74% p.a.
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0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
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21.49% p.a.
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55
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0.0
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3.00%
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$59 $0 in the first year
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$15.00
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2%, Min $2.50, Max $150
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Great Southern Bank Platinum Credit Card
0% p.a. for 25 months and then 21.74% p.a.
19.99% p.a.
$149 $0 in the first year
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19.99% p.a.
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0% p.a. for 25 months and then 21.74% p.a.
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21.74% p.a.
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55
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0.0
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3.40%
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$149 $0 in the first year
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$12.50
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2.00%, Min $3.50
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NAB Low Rate Card
0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
12.99% p.a.
$59 $0 in the first year
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12.99% p.a.
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0% p.a. for 32 months and then 21.74% p.a. (0% balance transfer fee)
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21.74% p.a.
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55
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0.0
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3.00%
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$59 $0 in the first year
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$15.00
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2%, Min $2.50
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Apply By 10 October 2021
humm90 Mastercard
0% p.a. for 36 months and then 25.99% p.a. (0% balance transfer fee)
23.99% p.a.
$99
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23.99% p.a.
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0% p.a. for 36 months and then 25.99% p.a. (0% balance transfer fee)
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25.99% p.a.
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110
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0%
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$99
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$35.00
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3%, min $3
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HSBC Platinum Credit Card
0% p.a. for 36 months and then 21.99% p.a.
19.99% p.a.
$129 $29 in the first year
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19.99% p.a.
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0% p.a. for 36 months and then 21.99% p.a.
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21.99% p.a.
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55
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29.0
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3.00%
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$129 $29 in the first year
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$30.00
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3%, min $4.00
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Apply By 30 November 2021
St.George Vertigo
0% p.a. for 30 months and then 21.49% p.a.
13.99% p.a.
$55 $0 in the first year
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13.99% p.a.
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0% p.a. for 30 months and then 21.49% p.a.
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21.49% p.a.
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55
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0.0
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3.00%
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$55 $0 in the first year
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$15.00
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2%, Min $2.50
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Apply By 30 November 2021
Westpac Altitude Platinum
0% p.a. for 22 months and then 21.49% p.a. (1.00% balance transfer fee)
20.49% p.a.
$150 $49 in the first year
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20.49% p.a.
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0% p.a. for 22 months and then 21.49% p.a. (1.00% balance transfer fee)
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21.49% p.a.
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45
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49.0
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3.00%
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$150 $49 in the first year
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$15.00
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2%, Min $2.50, Max $150
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^See information about the Mozo Experts Choice Credit cards Awards
