Free Flights, Free Coffee, Free Beer?
Free Flights, Free Coffee, Free Beer?\ \ Are you getting your free lunch?\ It seems a lot of people are either unaware of the difference between online transaction accounts and online savings accounts, or are just not in the habit of moving money from one account to another. Because of this, they’re missing out on lots of interest.\ So we let the Mozo Minions loose to find an explanation…\ Generally, a transaction account is your everyday bank account. You withdraw money from it, you pay bills from it, all the normal stuff. These accounts generally pay very, very paltry interest (typically 0.01% p.a). Savings accounts however pay a lot more interest (over 5% in many cases) but have a fewer access options.\ So what does a better interest rate mean?\ We took a hypothetical $2,000 initial investment and deposited $200 each month for a year and got the following free stuff with our interest savings:\ Bank Account Bonus Rate Rate Period Standard Rate Interest* Possible Free Stuff\ RaboPlus Premium Saver 5.75% p.a. Ongoing 4.00% p.a. $182 6.5 interstate flights\ UBank USaver 5.72% p.a. Ongoing 5.62% p.a. $181 57 Beers\ Citibank Online Saver 5.71% p.a. 6 months 4.25% p.a. $153 51 coffees\ ING Direct Savings Maximiser 5.85% p.a. 4 months 4.50% p.a. $153 91 iTunes songs\ AMP eASYSaver 5.75% p.a. 6 months 3.80% p.a. $145 14 JB Hi-Fi bargain bin DVDs\ St George Direct Saver 5.75% p.a. 4 months 4.20% p.a. $145 290 soft-serve cones\ Average Bank Avg. Transaction 0.01% p.a. Ongoing 0.01% p.a. $0.31 1 Flake, soft-serve cone not included\ Rates effective as at 10/3/2010 \ *Calculated assuming interest paid and compounded monthly. Rates used in calculation reflect rate structure of each account over 12 months given $200 monthly deposit.\ Not a bad return for a 10 minute online application!