Some valuable data were recently released in Rental vacancies lowest on record published by The Australian. In short the article argues that vacancy rates in Australia are at an all time low, interest rates are likely to raise, Australians are richer than ever before yet the consumer sentiment is on decline.

From where I stand, it all looks quite confusing indeed and my thinking process goes on the lines:

Oh vacancy rates are lowest ever, wow, lets look around for some investment property as the yield is surely to be pretty good
but wait
the interest rates are on the rise so the interest payments on the loan are going to go up so I better use very little of the borrowed money
but wait
without decent loan I can’t really afford any investment property so maybe I just buy some shares
but wait
the Australian share market is at an all time highs and surely its stellar rally can’t go on forever can it?

I would say that in times like these a huge potential exist for very unwise investing decisions. If the “trigger happy investor� with lots of available cash thinks, that his money must be promptly reinvested, now is the time for him to reconsider and take the extra time thoroughly analysing each particular investment opportunity which may cross his path.

And, as always in investing, if one’s analysis regarding the future prospects of the investment shows an inconclusive result, one must not be afraid to pass.

And giving a miss to the current investing environment is, in a sense, what I am bound to do myself. In the foreseeable future, I will more than likely sit on the market sidelines watching the buzz and thinking to myself that “cash is king�. All that while my “investing cash� is compounding hard in one of my favourite online savings accounts (by the way the interest rate returns on those do normally shadow the RBA interest rises too).

After all, follow the advice of W. Buffett in looking for the one feet hurdles you can step over rather than trying to jump over the seven feet ones.

As an addition to my previously published list of Top 20 Australian high yielding cash accounts I thought it could be a good idea to refresh our memories and review some essential tips & tricks when opening and using a bank account:

1. Try to get an account without the transaction fees
You may be a student, a pensioner or a child under the age of 15 eligible for a fee-free account offered to these groups of clients by most major banks. As different banks use different strategies ask, what kind of account is there for a person with your specific circumstances. Remember, you will need to ask because, in most cases, the banks won’t rush breaking their backs to offer you the free stuff.

2. Don’t pay the account keeping fees
There is quite a few accounts on the market which will not charge you any monthly account keeping fee if you maintain your account balance above the predefined monthly minimum. If you have such an account check you balance regularly and try your best to keep it in the “fee free zone�.

3. Use only your bank’s ATMs
Most of the time you will be hit by an extra fee every time you use ‘foreign bank ATM’. Be careful though, “foreignâ€? here means any ATM, which does not carry your bank’s logo on it. It could well be an ATM of another local financial institution yet if you use it, you will be charged this expensive (could be as high as $4) ‘foreign bank ATM fee’.

4. Get most of your free transaction limit
This one will require a little planning on your behalf but its well worth the effort. So assuming that you can’t get that transaction fee-free account, chances are, that your account has a monthly limit on number of free transaction you can make. If you exceed this limit than, yes you guessed it, you will be charged a fee for every additional transaction. Therefore be sure to know how many free transactions per month you can make, plan and use them well.

Some good techniques, which combine number of different transactions into one include:

• withdrawing additional cash out while paying for your regular shopping by EFTPOS
• making one big withdrawal of all cash needed for the days ahead; not lots of small daily withdrawals

5. Open an online savings account
Some of my favourite accounts are the online savings ones. I may sound like a sales rep here, but all the transactions are really done online from your home, there are no fees whatsoever, you will earn a very competitive interest on your money and the funds are at your disposal whenever you need them.
I have put together a little list of Top 20 Australian high yielding cash accounts so have a look and do the maths yourself.

6. Combine your banking needs
You may need to make some additional requests at your bank, however it is a fact that some banks will offer you more favorable conditions on any of their products if you can bring them new business.
For instance doing you everyday banking with the bank where you have your home loan, term deposit, car loan etc. should make you eligible for some nonstandard rates, relationship discounts, deposit bonuses, fee waivers etc.

7. Visiting the bank branch may cost you dearly
If you look at the fees charged for doing processing your transactions over the counter, it clearly shows, that your bank does not want to see you at their branch. Banks seem to deliberately structure their fees in such way, that you will be much better off doing all the banking yourself using their ATMs, EFTPOS, Internet and phone banking facilities. So plan your way through the “banking fees minefield� and keep the visits to your local branch at the necessary minimum.

8. Safeguard your PIN
It still amazes me how careless and lax some people can be when it comes to protecting the key to their hardly earned cash, the PIN. Did you know that most of the complaints arising from unauthorized ATM and EFTPOS transactions due to account holder’s negligence with his/her PIN are resolved in favour of the card issuer (ie. bank)? In other words if you give away your PIN and get money stolen from your bank account, there is a good chance that, effectively, you can kiss the stolen dough goodbye.

So let’s see some basic tips related to your PIN:

• keep it secret and don’t disclose to anybody
• remember it, don’t write it down anywhere
• don’t let anyone read it “off your fingersâ€? as you type it into ATM

8. Record your transactions
If possible and where practical try to keep the records of all your major transactions. This task gets somehow easier if you do most of your banking online as you should be easily able print and save the confirmation for every transaction you complete. When the time comes, check your records against the official account statement from your bank.

9. There is a life after banks
Keep on lookout for those smaller players within the industry. Quite often there will be a well established and trustworthy credit union, building society or community bank in your vicinity readily offering low fee alternative to a financial product of your major bank. Some of them have even made it onto my list of Top 20 Australian high yielding cash accountsso keep an open mind it could save you some hefty fees.

10. Understand your banking behaviour
When you receive your account statement, take few minutes, look through it and see how much you were charged in bank fees and why. Did you exceed your free transactions limit? Were you hit by a monthly account keeping fee because your balance went below the required minimum?

Based on what you learn from you statement you can draw one of two conclusions:

• either you see where you can make improvements in order to keep the fees in line
• or you know that you did what you should have done yet the total fees are through the roof. In this case consider changing to an account more suitable to your banking habits (eg. higher monthly fee with unlimited free transactions, lower monthly fee with only Internet facility etc.)

At the end of the day, it takes an effort to keep your money in your own pocket so try to be smart and don’t give any of it away if you don’t need to….well not to the banks anyway.

The information and motivation for this article were obtained from an excellent source of financial data, InfoChoice.

Lately I find it pretty hard to purchase any reasonably priced shares on ASX. Either the company does not comply with my stringent debt and earning levels or the current market price is simply way too high. As I may be staying in cash for some time, it prompted me to look around and compare the interest rates on high-yielding bank accounts.

Way back I opened ING Savings Maximiser account, which is one of those “no frills�? accounts where all the transaction need to be done over the Internet as ING does not even have any regular branches in Australia. I must say that I was pretty happy with them and never had any problems transferring the funds to and from my linked accounts in other banks. I also liked that, for most of the time, ING’s interest rate was always at the higher end of the range when compared to rates offered by different institutions. Recently however this seems to have changed by some agressive plays from BankWest, HSBC and the other players in this competitive market.

Therefore had a look around to see the parking options for my available cash. My requirements were:

• highest possible interest rate
• interest must be calculated daily and added to my savings monthly
• the funds need to be available to me at call
• none or minimum bank fees
• I don’t mind institution having no branches as I want to do all my transaction over the Internet anyway

The top 20 options where to park my cash I identified the following (ordered by the interest rate):

 
Please note that above data is correct at the time of writing. As the interest rates and banking trickery are both subjects to constant adjustments, check the newest information directly with the institution of your choice before you commit.