Friday, January 23, 2015

How to Earn 4.02% While Shopping for a House

Statistics in Australia suggest that there is an increasing number of first home buyers who refuse to be drawn into the Australian real estate market because they are convinced that the house prices are not going up in a hurry. Consequently, many are sitting on savings of around $150,000 as they take their time finding a home. So what should one do with the savings?

Most good online saving accounts give you just under 3% interest. Bankwest Telenet Saver account is offering 2.50% at the time of this publication and UBank's Usaver account recently dropped their intereest rate to 2.96%. Most people looking for a home won't want to lock their money in a term saver account and even if you do, banks offer around 3.50%.

I found out recently that UBank offers 4.02% if you open a UBank Saver Ultra Account. This account gives you an everyday transaction account which is a first for UBank. It comes with a debit card with a sweep facility which moves money OUT of that transaction account when your balance goes over (minimum $1000) and moves money IN to the transaction account when your balance falls under a certain amount (eg $100).

This means that you can earn more interest on your savings without having to log in and move money every month/year. So why bother? Doing this could increase your interest earnings by 36% (comparing UBank USaver's 2.96% with USaver Ultra's 4.02%). The only condition is that you deposit $200 or more into the USaver account each month. Anyway, over to you. If you have a better offer you know of, please leave a comment.

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