In recent articles I have discussed the advantages of the Australian Mortgage – with an emphasis on debt, and debt reduction. But what if you have no debt? What if you have already paid it all off?
If that is the case, don’t dismiss the Australian Mortgage without at least having a look, since it can also function well as a standalone bank account.
In fact with the right provider, it might well be the best banking deal around. Consider the following:
• Depending on the institution, the monthly fee can be as low as $7 for retirees
• Interest on positive balances as high as 1.75 per cent, based on current rates
• Unlimited cheque writing
• Unlimited online banking
• No fees for depositing or withdrawing through certain ATMs
• No fees on debit purchases
For those who are fortunate enough to be debt-free – and especially for those who tend to accumulate excess cash, this type of account can simplify banking by combining your chequing account and your high interest account into one.
Using this approach you no longer have to move money from account to account to get better rates. You automatically get the best rate on all of your cash — all of the time.
The only possible disadvantage might be the monthly fee. But when you look at the numbers, that really shouldn’t be a concern since people who have chequing accounts typically keep at least some cash in the account at all times for liquidity. The lost interest on this idle cash can easily exceed what you would pay in a year on monthly fees — not to mention the fact that you no longer have to worry about moving cash from account to account.
You can go for a walk on the beach instead!
For more info please feel free to call or e-mail.
Jim Grant, CFP (Certified Financial Planner) is a Financial Advisor with Raymond James Ltd (RJL). The views of the author do not necessarily reflect those of RJL. This article is for information only. Securities are offered through Raymond James Ltd., member CIPF. Financial planning and insurance are offered through Raymond James Financial Planning Ltd., which is not a member Canadian Investor Protection Fund. For more information feel free to call Jim at 594-1100, or email at jim.grant@raymondjames.ca. and/or visit www.jimgrant.ca.