$750 COVID-19 support payments to start hitting bank accounts this week

$750 COVID-19 support payments to start hitting bank accounts this week

About five million Australians will begin to receive a second coronavirus economic support payment of $750 this Wednesday.

Those living in Australia who are on social security, veteran and other income support, as well as eligible concession card holders, may receive the payment.

The government has begun rolling out payments today, which should start appearing in recipients’ bank accounts July 15 through to the end of July 2020.

The benefit is the second of two payments the government has handed out to coronavirus-affected Australians. About 6.6 million Australians received the first $750 payment between mid-March and mid-April.

The one-off economic support payments are non-taxable, as opposed to the $550 fortnightly coronavirus supplement, which is considered taxable income.

The roll-out of the second economic support payment comes about two weeks after the second round of superannuation withdrawals opened to Australians.

Who can receive the second COVID-19 economic support payment? 

Those living in Australia who receive any of the following welfare benefits as at July 10 may be eligible to get the second economic support payment, if you don’t already get the coronavirus supplement

  • Age Pension
  • Bereavement Allowance
  • Carer Allowance
  • Carer Payment
  • Commonwealth Seniors Health Card
  • Disability Support Pension
  • Double Orphan Pension
  • Family Tax Benefit A
  • Family Tax Benefit B
  • Pensioner Concession Card
  • Wife Pension
  • Widow B Pension
  • Veteran Service Pension; Veteran Income Support Supplement; Veteran Compensation payments, including lump sum payments; War Widow(er) Pension; and Veteran Payment
  • DVA PCC holders; DVA Education Scheme recipients; Disability Pensioners at the temporary special rate; DVA Income support pensioners at $0 rate
  • Veteran Gold Card holders

People on Jobseeker, Austudy and Youth Allowance won’t receive the second round of economic support payments, as they already get the coronavirus supplement.

Like the first economic support payment, for most who are eligible for the second round won’t have to do anything to receive the payment.

To find out more about the financial relief potentially being provided by your bank or lender, check out RateCity's COVID-19 Relief Hub.

How much is the government spending on COVID-19 economic stimulus?

The new round of coronavirus economic support payments is expected to cost $3.8 billion.

Treasurer Josh Frydenberg said the money will be spent across the Australian economy, while helping households deal with the economic impacts of the pandemic.

“The second $750 economic support payment will inject $3.8 billion into the economy and provide an economic lifeline to millions of Australians at a time when they need it most,” Mr Frydenberg said.

Together, the first and second economic support payments are anticipated to cost $9.4 billion.

Since March, the federal government has spent $259 billion, about 13 per cent of Australia’s GDP, on economic support measures for workers, households and businesses in response to COVID-19.

Mr Frydenberg is due to hand down an economic and fiscal update on July 23, which will include results of the JobKeeper scheme review.

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Learn more about savings accounts

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.