Consolidating Revenue
Sydney Morning Herald
Wednesday September 25, 2002
Now you can combine all your bank accounts into the one package, reports Christine Long.
If you like to run several bank accounts for different purposes, a new package could help.
With the Westpac One package, customers can run up to six savings and transaction accounts under a single umbrella.
For example, customers are able to earmark one of their accounts for day-to-day living expenses, one for bills, one for savings and one for holidays. As long as there are no more than two transaction accounts, money can be accessed from those accounts with a single card and PIN.
The money in each account is kept separate, but customers still receive a single statement, including graphs, for all of their accounts to show how they are tracking towards any savings goals they have set.
Andrew Willink, managing director of Cannex, says the package is the latest example of the trend towards providing customers with one report for the management of their money.
The package also extends the use of ``sweeping" technology, in home loans and credit cards, to transaction and savings accounts.
Peter Smith, senior manager at Westpac, says customers can nominate to have funds from their savings account automatically ``swept" into a transaction account if its balance hits zero to stop it going into overdraft.
The other benefit is that interest is calculated on the combined balance of the accounts.
For example, for a customer who has $7000 spread across five accounts, none with a balance over $5000, the interest is calculated at 0.05 per cent on each account. But with the Westpac One package, they would get the rate for balances between $5000 and $10,000 0.15 per cent. The interest is calculated on individual account balances and debited to that account.
And for any savings accounts within the package, the customer gains an additional 3 percentage points per annum if he/she makes at least one deposit and no withdrawals in any month. So he/she would receive 3.15 per cent per annum on that account for that month.
But it is worth noting that any transfer from a savings account to a transaction account within the package counts as a withdrawal.
The convenience comes at a price, though. The account-keeping fee on the package is $15 a month. This allows unlimited Westpac transactions but customers will still pay $1.25 a transaction for using use non-Westpac ATMs.
Lisa Montgomery, managing director of InfoChoice, says: ``You're looking at $180 a year for this facility that's a lot of money in real terms."
She says the cost is high compared with some of the other transaction and savings account options in the market.
On the transaction side, she gives the example of MCU Direct, the NSW lending division of Melbourne Credit Union, which has a transaction account linked to a Visa card that has eight free transactions at any ATM and 12 free EFTPOS transactions. Any Visa transactions are free.
Allan Willoughby, lending general manager at Melbourne Credit Union, says: ``In a nutshell, if someone placed their salary into a Visa account and used their own money they could effectively run the account fee-free with complete flexibility."
On the savings side, there are online accounts with no fees and rates as high as 5 per cent on relatively small balances.
Montgomery says the Westpac One package is unlikely to be attractive to mortgage borrowers who could save on interest costs by using an offset account.``The only real advantage I can see is it aggregates everything for the customer," says Montgomery.
Smith admits the savings and transaction accounts in the package cannot be used as an offset account by mortgage borrowers.
But he says that is being considered for the next stage in the product's development.
© 2002 Sydney Morning Herald