Inactive savings account government cash grab

Tuesday 10 December 2013

Article by Mozo

Australian households could lose up to $109 million from their family savings as the Federal government grabs cash from inactive bank accounts.

Inactive savings account government cash grab

Since legislation was rushed through parliament in May of this year the Federal government has had permission to transfer all money from accounts that have not been used for three years into their own revenues.

That will mean that accounts with anything upwards of $1 that have not had deposits or withdrawals made in the past three years will be transferred to the Australian Securities and Investment Commission.

The law, forecast to raise $109 million for treasury over twelve months is now just over six months in with money quietly being acquired by the government.

Money gathered up by the government can be reclaimed through ASIC, but the process is said to take months.

The largest negative impact has been seen by people who have put savings aside for children's education or other rainy day funds who have found their funds go missing.

Previous legislation had allowed bank accounts to remain idle for up to 7 years before money was transferred to ASIC.

Current Prime Minister Tony Abbot flagged the legislation as something to be revoked under his leadership but he is still yet to take action on the matter.

In the meanwhile, savers are encouraged to take matters into their own hands to ensure their accounts continue to register as active. It takes as little as one dollar transferred in an out of an account to ensure it remains active for another three years but consumers can do one better.

After an initial honeymoon phase of high interest rates, savings account and term deposits revert to a much lower interest rate (some of which barely keep pace with inflation.) Savers and rainy day account holders can benefit from taking action on their savings accounts at least every 2.5 years by moving their savings to chase higher rates.

Want to keep your savings safe for another three years? Compare savings accounts or term deposits and make the switch today.

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