How a bank can help with financial goals
Low-cost everyday banking and separate savings accounts.
Banks give you a place to keep your money until you want it. They offer different accounts to suit what you want to do with your money. Accounts for your day-to-day money have low fees to keep your banking costs down. Savings accounts can help you to grow your money, by paying interest.
Use separate accounts
Using more than one bank account to keep your savings or financial goal money separate from everyday money is a smart strategy. When savings are “out of sight, out of mind” you’ll be less tempted to make withdrawals before you reach your goal.
If your salary and wages are paid straight into your everyday account, you can set up an automatic payment to move a set amount into your savings account every fortnight or month. Or, you could move the money yourself using internet banking or an ATM. The money in your savings account will earn interest, which will help you achieve your goal.
Reduce banking costs
Most payment methods cost you something. There are fees for using EFTPOS, automatic payments, paying by cheque, online banking or withdrawing cash. If you use a credit card or store card you may be paying interest and other charges that can add up fast. Banks may charge 15c to 50c every time you use your EFTPOS card. Many people pay out $10 or $20 a month or more just for using EFTPOS. If you use another bank’s ATM machine, you’ll pay about $1 for the transaction. You can avoid bank fees – ask your bank about ‘fee free’ or ‘low fee’ accounts. Paying by cash or credit card is another way to avoid transaction fees (just remember to pay off your credit card in full each month).
Earn interest
When you’re saving for a goal every little bit helps. That’s why it’s a good idea to use a savings account for money that you don’t want to touch. Savings accounts pay interest, which is usually credited to your account each month. Shop around for your savings account because interest rates vary from bank to bank. Some pay only 1% or 2% interest, others pay considerably more. Higher interest rates often mean you can’t access your money straight away, but that can be a good thing when you’re trying to reach a savings target.
