Choice Says ‘Move Your Money’ To Beat The Big Banks’ $153 Billion Dollar Bonanza.
New analysis by CHOICE has found consumers are unknowingly giving the major banks a free kick of at least $7.3 billion dollars* by keeping $153 billion dollars of their cash in low- or no-interest transaction accounts.
The banks then lend out this cash bonanza at much higher rates, while continuing to charge customers hundreds of millions of dollars in fees and charges.
The Big Four offer 0.01 per cent interest or less on nearly all everyday transaction accounts, and with the exception of NAB, monthly fees apply unless you meet deposit conditions. In contrast they charge almost seven per cent to mortgage borrowers.
CHOICE is asking bank customers on World Consumer Rights (WCR) Day to do themselves a favour and move their money to accounts which pay more than just derisory rates.
“Banks are taking advantage of consumers’ lack of knowledge about which bank products suit them best,” says CHOICE spokesman Christopher Zinn.
“We all need to take the initiative and ask. Don’t wait for the bank to tell you about accounts that charge lower fees and pay better interest. Find out for yourself.”
On WCR Day consumer groups around the globe are taking action for fair and competitive financial services.
CHOICE is calling on the government to require banks to give consumers a standardised annual statement of the cost of their bank account, including all fees and charges.
The People's Watchdog is also updating, on a daily basis, their 'Compare, Ditch and Switch' website to make it easy for consumers to select the account that is best for them.
"Moving your money to a linked savings account that earns interest, with a bank that offers good customer service, is one of the easiest ways to take your revenge against the banks’ multi-billion dollar windfall," says Zinn.
TAKE ACTION AND MOVE YOUR MONEY ON WORLD CONSUMER RIGHTS DAY:
• Move your money: visit CHOICE'S Compare, Ditch and Switch.
• Choose an account that will pay you interest – the best value are online savings accounts, but there are also linked savings accounts for fast transfer to a transaction account with the same institution.
• Compare, ditch and switch your way to an account that will charge you no monthly fees.
NOTE TO EDITORS:
• *Based on official Reserve Bank of Australia (RBA) and Australian Prudential Regulation Authority data, CHOICE calculates that $153 billion was held in transaction accounts at major banks as of January 2011. Applying $153 billion to the current Reserve Bank cash rate of 4.75% provides $7.3 billion dollars in additional revenue. This figure does not take into account interest rate fluctuations or banks' own margins on lending products.
• WCR Day marks an historic speech on consumer rights given by President John Kennedy on 15th March, 1962.
For more information see our Move your money report: www.choice.com.au/moveyourmoney.
• Christopher Zinn, CHOICE Director Campaigns and Communications: 0425 296 442
• Richard Lloyd, CHOICE Better Banking Campaign: 0411 788 076
• Ingrid Just, CHOICE, Spokesperson: 0430 172 669