Topic 1: How to avoid fees and charges for your financial services
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For most things in life, your needs change over time. The car that was ideal throughout your twenties and thirties may no longer suit your needs in your sixties and seventies. The same might be said for your home, wardrobe, appliances and furniture.
Intangible items like the day-to-day services you rely on, can also become outdated or less-than-suitable for your current needs. This is particularly true for your everyday banking services.
It’s worth reviewing your bank accounts regularly to ensure they’re both meeting your needs, and that you’re happy with the service your bank is providing you. There may or may not be a case for switching, but a regular review will highlight any issues you may need to act on.
Aussies however, can be reluctant to switch banks. According to comparison firm Finder.com.au, 40 per cent of survey respondents were still with the same bank their parents had signed them up with as a child.
This equates to over seven million Australians who’ve never switched banks, and could be forgoing better suited savings or transaction accounts, Finder.com.au reported.
The research also revealed several solid reasons to review your banking arrangements.
Only 22 per cent of survey respondents were happy with their current bank – meaning that nearly 80 per cent were not. And, according to Bessie Hassan, Money Expert at finder.com.au, 67 per cent of those Australians who had switched banks, had found a better suited product.
“One of the biggest barriers to switching is the perceived effort involved, but it’s not rocket science, and switching to a new bank could definitely be worth your while,” Hassan said.
“There’s no point staying loyal to a bank if it’s costing you money. Compare savings accounts online and find out if you could be getting a better interest rate or features.”
Transitioning through major financial milestones like child rearing, paying off your mortgage or preparing for retirement can be a great time to review your bank accounts and credit cards to ensure you’re getting the features that work for your changing needs.
Here are some tips to ensure you’re getting a great deal, while reducing fees and charges on your bank accounts.
1. Conduct an annual banking review
A review helps you to see if the accounts you have are still suitable for your current needs or if there is another way to save.
When reviewing your existing accounts and comparing with those at other banks, look at what sort of fees and charges you’re currently paying on transaction accounts and how much credit interest you are receiving on deposits, and take stock of what you actually need in a bank account for your current stage of life.
For example, do you prefer going into a branch more or using ATMs? Can you switch to a no or low-fee everyday account? Do you need additional features or will the bank offer extra incentives for switching to them?
2. Consolidate your accounts
Holding multiple accounts across different banks can attract avoidable fees and account keeping charges.
When reviewing your accounts as per the previous point, assess whether you still need your finances spread across different banks. You can simplify your banking and cut out unnecessary fees by closing unused accounts.
You may also be in a better position to negotiate by consolidating your finances with one bank.
3. Investigate moving to retiree-friendly accounts
Many banks offer no-frills accounts specifically tailored for over fifties and retirees.
St. George’s Retirement Access Account for example, currently offers free-free EFTPOS, direct debit and visa debit transactions, and fee-free ATM withdrawals throughout the Westpac Group’s network.
Pensioners who hold a Senior’s Card or a Commonwealth Government Health Concession Card may be eligible for accounts such as St. George’s Concession Account. Accounts like this typically waive fees for the most frequently-used banking functions.
It’s worth speaking with your bank to look at the account which suits your current financial circumstances.
4. Review your online spending
While credit cards are a convenient way of making purchases – and sometimes the only payment option available on some websites – be aware of the credit card fees that the website may charge you when you buy or book online. It’s also worth noting any booking fees you may be racking up when you buy tickets, as these can add up over time.
Buying online from foreign companies can also incur costly currency conversion fees. Given the transaction fees and postage costs, it may be cheaper to buy the same item locally even if there is a higher advertised price in Australia, or consider a card that offers fee-free foreign transactions.
5. Consider using a balance transfer
If you have accrued a balance on a credit card, consider switching to a card that offers you 0 per cent on balances transferred, then figure out a regular repayment to enable you to pay off the balance before the 0 per cent interest period ends. If you choose a card with no annual fee this is an excellent, low cost way to manage and pay back small amounts of debt.
6. Negotiate a better deal with your existing bank
Whether you keep your accounts with your current bank or choose to switch banks, it’s worth asking for a better deal on all of your accounts.
Similarly, if you have a good credit score, you can potentially use it to your advantage to negotiate discounts with your bank – or other financial services providers for that matter.
You can find out your credit score using websites like Finder.com.au or GetCreditScore.com.au.
While much is currently being written about the benefits of shopping around for a better deal, it can be time-consuming and is not the only alternative. It’s worth speaking with your existing bank, who may be able to provide you the same deal without needing to switch.
“Ask your local branch about a full banking review to ensure all your products and services are meeting all your needs and goals. We recommend you do this every 12 months to keep up with your families changing priorities,” said Ross Miller, St. George Bank’s General Manager – St.George Retail Banking.
It pays to take an active role in the management of your finances and everyday banking accounts to ensure they stay relevant for your needs, now and into your future.
How often do you review your banking arrangements?