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

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 SizeAverage rateLowest rateMonthly savingsAnnual savings
$400,0003.75%2.69%$224$2,683
$500,0003.75%2.69%$279$3,353
$750,0003.75%2.69%$419$5,030
$1 mil3.75%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 cardAnnual feeInterest rateAnnual interest payments
Average standard credit card$13116.66%$341
No fee low rate credit card$08.99%$167
Difference$1317.67%$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

BankMonthly 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 planDataCallsTextsMonthly price
Telstra - Small15GBUnlimitedUnlimited$50
Amaysim Unlimited 40GB40GBUnlimitedUnlimited$30
Difference+25GB00$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.

Did you find this helpful? Why not share this news?

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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Learn more about bank accounts

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

What do you need to open bank accounts?

Opening a bank account is one of the simplest online tasks you could perform. The hard part is deciding which type of bank account you want to open.

All banking institutions have a website where you hit ‘apply’ on the account of your choice and step through an application in less than 10 minutes.

Here’s a list of information that is generally required for applications.

  • Identification (driver’s licence, passport, proof of age card, proof of citizenship and/or birth certificate)
  • Tax file number (so you don’t get charged the highest tax rate)
  • Address, contact email and phone number

If you decide to open a new account at the branch, make sure you ask beforehand what information you need to take with you, or take all of the above to be safe.

Can debt collectors take money out of your bank account?

Many people find themselves struggling to cope with debt at one time or another. In these cases, a debt collector could contact you to demand payment for a debt, to explain the consequences of you failing to pay a debt, or to organise alternative payment arrangements.

If you’re contacted by a debt collector, you may be wondering what their rights are and whether they can take money out of your bank account.

Creditors cannot access money in your bank account unless a court order (also known as a ‘garnishee order’) is made to allow creditors to recover debt by taking money from your bank account or salary.

If this happens, the creditor can take money out of your bank account unless you pay the debt in full or make an alternative payment arrangement such as paying in instalments through the court.

Do you need a bank account to get a credit card?

To get a credit card, you need to show proof of income, which will almost certainly require you to have a bank account.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

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.