Fix your finances in 2020 and save over $3,000

Start the new year with more money in your pocket by making four simple changes to your finances – it may save you over $3,000 in 2020.

1. HOME LOAN – switch and save $2,683

If you have 25 years left on your $400,000 home loan and are paying the average rate of 3.75 per cent and switched to the lowest rate on the market, you’d save $224 a month and $2,683 a year.

Savings when refinancing from average to lowest rate – owner-occupier (P&I)

Loan Size Average rate Lowest rate Monthly savings Annual savings
$400,000 3.75% 2.69% $224 $2,683
$500,000 3.75% 2.69% $279 $3,353
$750,000 3.75% 2.69% $419 $5,030
$1 mil 3.75% 2.69% $559 $6,706

Notes: Based on an owner occupier paying principal and interest (P&I) switching 5 years in to a 30-year loan using the average rate on RateCity.com.au. Does not factor in fees. Average rate based on average owner-occupier P&I variable rate on RateCity data base. Data accurate as at 14 January. 

Consider looking for a home loan with:

  • A rate below 3.20%
  • $0 annual fee

Keep in mind that there are typically costs associated with refinancing your mortgage. For more information, please read our Refinancing Guide.

2. CREDIT CARD – switch and save $305

You may significantly reduce your credit card interest payments if you switch to a low-rate and no fee alternative.

The latest RBA statistics show the average credit card account has $1,980 outstanding at the end of the month.

The average credit card interest rate on RateCity’s database is 16.66 per cent, while the annual fee is $131.

However, if for example you switched to NICU credit card, you’d pay 8.99 per cent and $0 respectively.

If you made minimum repayments (2 per cent) on a balance of $1,980 debt over 12 months, you’d be charged $341 interest on the higher-rate card but only $167 on the lower-rate card.

Differences between credit cards

Credit card Annual fee Interest rate Annual interest payments
Average standard credit card $131 16.66% $341
No fee low rate credit card $0 8.99% $167
Difference $131 7.67% $174

Notes: Figures based on a balance of $1,980 over 12 months. Annual interest repayments assume minimum monthly repayments of 2 per cent and factors in annual fee. Interest calculated monthly. Data accurate as at 14 January. 

Consider looking for a credit card with

  • No annual fees
  • No ATM charges
  • No foreign exchange and ATM fees

3. TRANSACTION ACCOUNT – switch and save $63

You can save a lot of money by shopping around for a no-fee bank account. There are now a growing number of banks that offer accounts with no monthly fees, as well as perks like no overseas exchange fees and ATM charges.

On RateCity’s database, the average monthly fees on a transaction account is $5.25 a month. That’s $63 a year.

However, 72 per cent of transaction accounts have no monthly fees, so it’s easy to find a fee-free option if you do your research.

Differences between bank accounts

Bank Monthly fee
Average transaction account $5.25
Lowest fee transaction account $0
Difference $5.25

Note: Data accurate as at 14 January. 

Consider looking for a transaction account with:

  • No monthly fees
  • No ATM charges
  • No foreign exchange and ATM fees

4. PHONE PLAN: switch and save $240

Another way to save money in 2020 is to switch from a phone plan with a big brand to a similar plan with a lesser-known company.

Let’s say you own your own phone and want at least 15GB of data per month, unlimited calls and texts and access to a high-speed 4G network.

Telstra’s Small plan offers all that for $50 per month, whereas Amaysim offers these features as well as 25GB more data for $20 less as well as the bonus of unlimited international calls to 10 countries.

Differences between phone plans

Phone plan Data Calls Texts Monthly price
Telstra - Small 15GB Unlimited Unlimited $50
Amaysim Unlimited 40GB 40GB Unlimited Unlimited $30
Difference +25GB 0 0 $20

Note: Data accurate as at 14 January. 

How to begin your $3,000 savings journey

One of the easiest ways to find more competitive bank accounts, credit cards or home loans is to use comparison tools, such as tables and calculators.

    • Comparison tables are a helpful way to compare apples with apples. You’ll filter down and view a range of options side by side, so you can clearly see their interest rates, potential repayment amounts, fees and any features.
    • Calculators can allow you to see if you can afford one or more options you’ve compared. This is done by showing you your potential monthly/fortnightly/weekly repayment amounts.

Comparison tools can be helpful for budgeting or judging which options will cost more over time due to interest rates or fees.

Keep in mind that switching financial products can incur fees, such as upfront fees. Make sure you do your research and read the Product Disclosure Statement of your new product before you commit to anything.

By making the switch to more affordable loans, credit cards, or bank accounts, you could kick some financial goals early in 2020.

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Learn more about bank accounts

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do you find a bank account number by name?

For privacy reasons, Australian banks won’t hand out account numbers or other details about their customers. However, if you provide a bank with a BSB and account number, they should be able to confirm if those numbers belong to one of their customers.

How do you change your account name on NAB banking?

Changing the name on your NAB bank account is straightforward, as long as you have the right documents.

If you’ve just got married, divorced or legally changed your name, here’s what you need:

  • Married – a marriage certificate
  • Divorced –your ‘decree nisi’
  • Legal name change –your legal name change certificate

You can take either the original document, or a certified copy, into a NAB branch, where it needs to be sighted by a bank employee and a copy taken.

Your NAB bank account name will be updated immediately. New debit, ATM and credit cards with your updated name will also need to be issued. These usually take between five to 10 working days to be posted out to you. Your existing cards will keep working until you activate your new ones.

If you haven’t legally changed your name, but just want to change your account nicknames, you can log onto NAB and do it through the Settings/Mailbox menu.

Can I close a bank account with pending transactions?

You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.