6 financially positive things that came out in 2020
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!
#1 - Home loan rates started with a ‘1’
It feels like yesterday the market was buzzing with news that home loan rates had reached below 3%. But now it seems that trend has officially left the building, as 2020 was the year that home loan rates began starting with a ‘1’. And the good news is, that rock bottom rate feeling was spread into both fixed and variable rate options.
For instance, the Reduce Home Loans Super Saver Variable Home Loan is currently offering Aussies with an LVR of 80% a 1.99% variable rate, while borrowers who opt for the loans.com.au Smart Booster Home Loan could take advantage of its one-year discount rate of 1.99%.
On the other hand, fixed rate options are also aplenty, from credit unions to online lenders across one to five-year fixed terms.
#2 - Open Banking officially kicked off
While the idea of Open Banking has been floating around for years, this year the country took big steps toward greater transparency within the banking realm. As a quick catch up, Open Banking refers to a system where consumers are given greater freedom over how they share their data with other financial institutions.
On 1 July 2020, the Consumer Data Right (CDR) was launched and is a key component of Open Banking. CDR is the service that facilitates the move toward Open Banking where consumers can share their banking data with other institutions, like fintechs, credit unions and even comparison websites!
All this means that Aussies will have greater power over who they choose to bank with and can score a better deal on things like their home loan, if their credit score is in exceptional condition.
#3 - Wholesale energy prices hit their lowest in five years
Despite the fact that Aussies spent more time than ever at home, figures from the Australian Energy Regulator (AER) found that wholesale electricity prices were at their lowest since the 2014/15 financial year ranging between $56 per MWh in Queensland and $84 per MWh in Victoria.
According to the regulatory body, the reason for the drop could be attributed to lower fuel costs for generators and a considerable increase in large-scale solar and wind generation.
There was also good news for households within certain distribution zones, as Mozo research found that Aussies could save between $200 - $300 a year just by making the switch from the average to the cheapest energy plan.
#4 - We improved our money habits
Although the COVID-19 pandemic might continue to impact the way we work, shop and interact with others, it also had a positive impact on our money habits. Mozo research earlier this year found that 39% of Aussies plan to spend less on non-essentials, like dinners out and retail.
However, 1 in 4 Aussies have vowed to eradicate their personal debt, including debt accumulated on a credit card or personal loan.
“For many people, COVID-19 has been a wake up call to get their finances in order, and eliminating debt is a key part of that,” said Mozo Director, Kirsty Lamont.
If you’re keen to get your debt-free journey started, our balance transfer credit card comparison tool can help find the right option for you.
#5 - Westpac launched a 3% savings account for younger Aussies
To give Aussies aged between 18 - 29 a hand with saving, Westpac shocked the market by launching its Westpac Life savings account, which features an interest rate of up to 3%. But in order to snag that hot rate, customers will need to increase their balance by the end of the month and make five transactions through a linked Westpac Choice transaction account.
The account also comes with a few handy features, like the Savings Goal function. This allows customers to create ‘savings buckets’ and can automatically transfer cash into chosen goals, like a home deposit or new car, taking the hassle out of long term saving.
#6 - NAB and CommBank launched an interest-free credit card
As more young Aussies turn to Buy Now, Pay Later (BNPL) services to manage their spending, two big banks decided to deliver their own versions.
Three months ago, NAB unveiled its StraightUp interest-free credit card. In exchange for interest-free spending, customers are charged a monthly fee of between $10 - $20, based on the credit limit they have selected for the card.
To size up the competition, CommBank then launched its own version, called the CommBank Neo interest-free credit card. Similar to the StraightUp card, customers have their pick of three credit limits and are allocated a monthly fee based on the limit they have chosen.
But as with any new product, do your research before signing the dotted line. So to make sure either interest-free credit card is the right option for you, find out how they stack up to low rate credit cards.
Want to find out what else went down in 2020 (ahem, besides, you know), head on over to our Family Finances Hub!