Bank Accounts. Yeehaa!
If you would prefer to listen to me read this blog post, please click on the play button.
Simple stuff this week.
This might be preaching to the converted but I have just been reviewing our everyday banking set up as I tend to do every once in a while.
Throughout my life I’ve had many interactions with money that have left a lasting impression. I like to call these my Money Memories. A relevant one to this post comes from when I must have been about seven years old. My four siblings and I were lined up in front of Mum who was sitting at our big old beautiful kitchen table handing out pocket money. I recall that we were not crowded around but were in an orderly line, probably from oldest to youngest (me). I think the reason I recall this is that receiving pocket money was a pretty unusual occasion. Bless her cotton socks, Mum would start off with a hiss and a roar and we would do our chores and get paid accordingly. The amount was about 50c. Yes, 50c did actually buy something in 1980. But then a week or two into this “chores = pocket money” equation and payday would taper off. Mum didn’t get to the bank that week so had to write and I.O.U. and then inevitably the whole thing would just STOP. She also reasoned that as we lived in the wop wops there were not many places for us to go shopping.
It made it a bit tricky with the school banking. My spasmodic wages for household chores did not make me a very consistent saver. I was probably not very good at doing my jobs either as with all those siblings we could blame the work NOT getting done on each other. Although I have a bank issued piggy bank from back in the day, my very first bank book was apparently not worth keeping, due to the lack of deposits I believe...
But what did stick was a relationship with a bank. I’m not a historian but from what I can recollect it went something like this:
When I was a wee mite I took my pocket money to school and deposited it with the Post Office Savings Bank. As I grew up this bank became PostBank. A few years after that PostBank was acquired by ANZ which is now an enormous banking entity. As if in a dream like state I stayed with these banks and as each brand grew into the next I went along with it.
And that is how it was for most of us I believe? When it was time to go to University off to the bank I went and a new awesome concept was revealed to me, an overdraft. This was brilliant, until I reached my limit that was and I had that “uh oh, that was not a good idea” moment. Then the years ticked by and I met my soul mate (ahhhhhh) and we bought a house. Here is where my relationship ended. With my bank that is.
We both banked with different banks and in the interests of fairness decided to go with a bank neither of us were with, so we chose the National Bank. There were several reasons for this: Our friend worked there, they had a nice horse logo, I liked the colour green and they agreed to give us a mortgage! Honestly, it’s sometimes a surprise to myself that we are not flat broke today based on these former investment strategies.
But, as alluded to in previous posts I did get my s**t together and started to do a lot more research into where we banked. When National bank came under the ANZ brand just a few short years ago AND they refused to stump up 0.2% for a term deposit my time was done and I finally and carefully shopped around banks.
It is not hard to change banks, it just takes time to transition from one to the other. Its also a really good exercise as it makes you really look at every transaction as you want to make sure that you are paying bills from the correct bank.
So, now we are with Taranaki Savings Bank (TSB) and there are several reasons:
- They are all online, I have never been in a TSB branch
- In the rare times I have needed to deposit a cheque or cash I can do this at NZ Post
- I will not bump into an TSB representative at the supermarket or local bar
- I went to school with their TV spokesman Roy Snow and he was a very nice person!
- You can win a car or cash! Another reason not to bother buying Lotto tickets
- I can do almost everything myself online
- Fees are low
- I like that they are a New Zealand bank
- Very good phone app and website
I started by opening up two accounts:
- Everyday Premier Terrible interest rate of 1.50% for amounts up to $19,999 (the rates go slightly higher the more you have). But I always keep the amount in this account low anyway so it does not really matter.
- Websaver This is where I siphon off money and when it builds up I invest it somewhere else. For amounts under $1,000 you get interest of 0%. When you have over $1,000 its 2%. If you take money out of this account you do NOT forgo that month’s interest.
When we built our current house we did it with cash. We had $300,000 or so in an account of our former bank and had to take out large chunks to pay at each stage of the build. Each time I took money out I had to forgo the interest for the month. Ultimately this is what led me to start searching for another bank. It made me so mad!
Then I added another Websaver account for my daughter and a Term Deposit account. Over the last couple of years I have opened and closed other accounts as needed for a variety of reasons I won’t bore you with.
Apart from my Term Deposit, the bank is not where I do my saving (ironic), it is where I store cash we need in the short term and it is where I save up chunks to invest somewhere with better returns. Bank interest rates and Term Deposits (if you have not read my Term Deposit post you can find it here) are just too low these days.
Bank accounts are not a set and forget. Banks change things and if you don’t watch much TV and have opted to receive statements and communications by email then you fall behind in what they are offering. I was embarrassed to work out that with my daughters account she did not receive any interest for a good long while as the balance was under $1,000. Oops! They did tell me this but I did not act on it at the time and promptly forgot.
For all of these accounts I pay a $10 monthly fee. YES, I have tried to get this waived without result I’m afraid. I do keep trying though; always pays to ask. Also, I’m yet to win a car which is a great shame, I would quite like a new car. Had I stayed with the other bank we would be paying more fees and losing out on interest each month. The TSB are great for us right now but I’m not loyal and am always watching and always keeping an eye on what others are offering.
That’s it for me this week! I would love to hear any of your banking tips, share the knowledge I say, and we will all be saving more. What do you have to lose, make a coffee and go and do a warrant of fitness on your bank asap!
P.S. I have not been paid to mention any of these banks!