For those in Perth always looking for a better, faster, cheaper way

Wednesday, April 21, 2010

Introductory Bank Rates - don't be fooled

Banks - Introductory specials

Raboplus got me in a few years ago with an introductory $100 added into my bank account if I deposited $1000. Many other banks also offer introductory rates as a higher interest rate - don't be fooled into thinking that is the rate you will be enjoying 1 year down the track. I was happy with that because at the time they were very competitive but that did not last long. Also, with Raboplus, they had a gadget which you need to use in order to authenticate your login, which is great for security purposes but makes it that little bit harder for you to decide to churn to another bank account. This became an issue when Raboplus stopped being as competitive as the other online saver banks and I switched all my Bankwest telenet money to Ubank which was offering a much better rate than Raboplus.

After almost six months of wanting to change from Raboplus, after earning an extra 1%+ with Ubank, I finally remembered to change banks while I was in the vicinity of the Raboplus gadget AND I was able to find the login number. I can imagine people who were less committed would have just let Raboplus keep their money and that's what they want.

Inertia once again is a bank's best friend.

How much difference does the interest rate make? 

Bankwest is offering 5.75% for their telenet saver account, but this is only for the first 12 months after which it drops to 4.25%. After the first year, you will be 1.6% behind Ubank's equivalent Usaver account which pays  5.85%. If you invested $10,000 in both banks, after the second year, you would be around $180 worse off with Bankwest assuming rates remained the same. If my calculations are wrong, please feel free to leave a comment..

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