Need to know
- Customers of Westpac's regional brands have lost bonus interest and missed payments due to limits on recurring transfers at these banks
- The same restrictions aren't put on customers who bank with Westpac directly or with other big banks
- Watch out for reminders if your bank puts limits on how long a recurring payment can be set to run for
A good deal of our everyday banking in the digital age can be a case of set and forget.
For example, a quick visit to your bank's website or app allows you to set up a recurring payment to move money between your accounts or into those of others on a regular basis.
From keeping the right balance in our home loan account, to making sure we pay those we owe, such functions help us keep our financial affairs in order while we get on with our lives.
Missed transfers mean big cuts to interest
Recurring transfers are also often key to making the most of a high interest savings account.
High interest savings products that come with a bonus rate usually require you to make regular deposits into them or linked accounts in return for paying some of the best rates on the savings market.
CHOICE has previously reported that many Australians who are retired or on low incomes often rely on the interest earned in savings accounts to make ends meet.
But what high interest accounts give, they can also take away. Not meeting deposit conditions will lead to your rate being slashed, often to a figure less than what you'd earn in a basic, no-conditions savings account.
Missing a transfer can therefore lose you some serious coin – something some CHOICE members have learnt from experience.
Missing a transfer can therefore lose you some serious coin – something some CHOICE members have learnt from experience
We recently heard from one Bank of Melbourne customer who missed out on bonus interest after a recurring transfer they had set up with the institution expired without them knowing.
The member discovered the arrangement they had set up via the bank's app to move money from a transaction account into a savings account had a time limit of two years before it had to be renewed.
The Bank of Melbourne account with the highest ongoing interest rate is its Incentive Saver product, which attracts interest at 4.65% as long as you deposit $50 into it every month.
A recurring transfer from an everyday spending account is one way to make sure this happens.
But not doing this, such as if your transfer arrangement expires and you forget to renew it, means the rate will be slashed to only 0.40% – a noticeable cut if you're used to earning a healthy amount of interest every month.
Restrictions on some Westpac brands, but not others
Westpac's regional banks put a time limit on recurring transfer arrangements.
Bank of Melbourne isn't the only financial institution to have time limits on how long recurring transfers set up via online or app banking can run for at a time.
CHOICE has also heard from a St. George customer who missed an important payment after encountering that bank's 24-month cap.
Bank SA has the same limit on how long its customers can set a recurring payment to run for.
These three businesses are all regional brands of Westpac, but the big four bank doesn't put the same restrictions on customers who bank with it directly.
Westpac personal customers can set up recurring payments with no specified end date.
This is the norm across the other big four banks – Commonwealth Bank and ANZ customers can select "no end date" when setting up recurring transfers and NAB users can similarly choose for these payments to continue indefinitely.
Westpac doesn't put the same restrictions on customers who bank with it directly.
Westpac didn't answer directly when we asked why it puts this limit on its regional brand customers, but not on those who bank with it directly.
A spokesperson said only that the company "offers a range of products and services across its brands" and that "features and functionalities may vary between brands."
Keep an eye out for notifications
Banks that put time limits on recurring transfers should send you reminders when they're about to expire, but the experiences of some CHOICE members suggest these can be difficult to spot.
Therefore, if your bank has these restrictions, it's a good idea to get familiar with how it will share this information with you.
Westpac says its regional brands send customers a notification (a message to their inbox on a bank's app or website), one month before a recurring transfer arrangement is set to expire.
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