After 30 years in the money business I’ve seen plenty of industry changes – some good, some not so good. But one of the most useful developments over the last three decades would have to be the opening up of the internet to everyday Australians. It’s a remarkably handy tool that can play a vital role in sensible money management.
Of course the internet does have its downsides. Just about anyone can set up a professional looking website or provide ill-informed commentary about financial products. So it pays to be picky about which websites you use.
For information about a whole range of money matters that is accurate, impartial and updated regularly, I reckon it’s hard to go past the Federal government’s new MoneySmart website.
MoneySmart replaces the Australian Securities and Investment Commission’s FIDO website, and it features an extensive range of fact sheets, hints and tips plus a number of online calculators. Use them to find out how long it could take to pay off your credit card if you stick to the minimum repayments. Or discover how much you should be adding to your super fund to have an enjoyable retirement.
I’m also a big fan of ‘comparison’ websites. These allows users to compare the interest rates and other charges applicable to home loans, savings accounts, credit cards and even personal loans – all at the click of a mouse. It’s a very quick and easy way to get better value on your main banking products. Take a look at sites like Mozo, InfoChoice and RateCity.
The internet also offers another tremendously useful function – online banking, providing the means to manage our money anywhere, at any time. It’s also extremely cheap. You’ll pay just a few cents for an online transaction, or nothing at all, compared to up to a few dollars if you use an over the counter service.
For the most part online banking is very secure, and its use isn’t restricted to our everyday bank accounts or online savings account. Most managed funds and many super funds also let you check the balance of your investment online – a vast improvement from the days when we only received a paper statement every six to 12 months.
A number of financial institutions have opted to operate almost exclusively via the internet. Without the costs of a bricks and mortar network, many offer very good deals.
Plenty of online savings accounts for example are paying interest topping six per cent. Newcomer Virgin Money is offering a whopping 6.5%. Or take a look at UBank plus a raft of smaller financial institutions – all of which are paying 6%-plus on online savers.
A number of these accounts pay bonus interest when you make regular deposits, which is a big incentive to save regularly. For example, open an online savings account paying 6% with just $500, add $50 each week and after two years you could accumulate around $6,085. That’s a decent pool of emergency cash or the basis of a long term investment portfolio.