04.Move Your Money campaign news
Banks mine fee transaction gold - 4/03/2012
- $166.4 billion – The amount Australians keep in transaction accounts with the Big Four that earn little to no interest.
- $7.16 billion – A conservative estimate of the amount we gift the Big Four by leaving additional funds in transaction accounts.
Australian banks use domestic deposits as an imperative part of their funding mix, especially when global markets are instable. While those with term deposits and high-interest savings accounts are compensated accordingly, if you have additional money in a transaction account then you’re gifting the banks free funding, which they can use to lend and earn interest.
The figures above are estimates, because recent funding ratios are not publically available. We’ve included transaction account deposits for the Big Four only, so the figures can only go up.
*Calculations based on official data from APRA and the RBA accurate to December 2011.
Fees still fill coffers
[Note: Transaction account data is for the Big Four only, and fees are based on 17 institutions.]
Each financial year, the RBA surveys 17 major financial institutions about their banking fees. The latest data from the 2010 financial year indicates banks received $4.24 billion in income from fees on everyday banking products. Considering competition in banking has driven a number of financial institutions to deliver fee-free everyday banking products, we think consumers are still paying too much.
There is some good news, penalty fees have been cut literally cut in half. Exception fee income fell from $1.29 billion in financial year 2009 to $652 million in financial year 2010. Housing loans earn the most in fees from households at $1.31 billion, credit cards follow closely at $1.26 billion and transaction accounts earn $1.19 billion despite there being many fee free products now available on the market.
Bank’s bottom line not the only story
Banks cry poor, and consumers want a fair go – it’s an age old story, but it can have a happy ending. We know Australia needs a healthy banking sector to support its already strong economy, but it’s time more consumers received a better deal.
While the banks are busy protecting their bottom line, The People’s Watchdog wants to deliver a different message – if you’re fed up with bad behaviour from your bank, it’s time to move your money.
Move Your Money campaign launches in Sydney’s banking HQ - 20/02/2012
CHOICE has launched the Move Your Money campaign in Sydney’s Martin Place, the headquarters of Australia’s big banks.
On the morning of Sunday 19 February, the CHOICE campaigns team took to Sydney’s central business district armed with the Move Your Money wheelbarrow, piles of ‘fake money’ and a ringing bell. This symbolised the call to action for Australian consumers to look for a better deal beyond the major banks, and if they find one, move their money and save.
The campaign is inspired by the success of similar Move Your Money actions internationally. This includes in the United States where already four million consumers have moved transaction accounts from larger to smaller community-based institutions, described as the move from ‘Wall Street to Main Street’.
The CHOICE Move Your Money campaign launch was accompanied by the publication of a new investigation showing that banks were failing to provide consumers with Home Loan Fact Sheets, one of the Australian Government’s key consumer banking reforms.
On a day that was dubbed ‘switching Sunday’, the Move Your Money launch also coincided with separate bank switching calls to action from the union movement and ABACUS, the body representing Australian credit unions and mutuals.
You can join the CHOICE Move Your Money campaign by signing the petition.