Banks behaving badly can lead to a better deal for customers

Certified financial planner Patrick Canion says nobody cares more about your money than you. Picture: Supplied.

AS banks are in the bad books for surprise interest rate rises and the damning royal commission, this has created an opportunity for customers to get a better deal.

Whether it’s home loans, credit cards, savings accounts or other products, there are ways to extract more value from your bank — particularly while they’re bending over backwards to retain frustrated customers, money specialists say.

“No one’s ever going to care more about your money than you do,” certified financial planner Patrick Canion said.

“You will receive what you are prepared to accept.”

Mr Canion said the key to a better deal is understanding your bank’s criteria for being a valued customer.

“You can ask the bank what will have to change for me to get a better deal, but more generally it’s the overall principles of do you make payments on time, have you got a steady income, have you got a good credit rating, if you have a home loan are you building good equity?”

People should research available deals in the market, present them to their own bank, and be prepared to switch if necessary, Mr Canion said.

Certified financial planner Patrick Canion says nobody cares more about your money than you. Picture: Supplied.

Certified financial planner Patrick Canion says nobody cares more about your money than you. Picture: Supplied.Source:Supplied

“The difficulty is mainly in your mind. When you look at what you can potentially save, it really doesn’t take a lot of time — an hour on the internet or calling a couple of banks or mortgage brokers.”

He said customers should check ASIC’s moneysmart.gov.au calculators to see what difference just half a percentage point could make.

For example. A 0.5 percentage point interest difference on a typical 00,000 loan is 1 a month or almost 100 a year.

On a savings account, that same interest differential adds more than 20 for every 0,000 deposited when compounded over a decade.

Consumer banking specialist Lisa Montgomery said now was the time to act, “given what’s happening in relationship to the royal commission and unsavoury behaviour by some of our large financial institutions”.

“Sometimes we might find accounts we have with our financial institutions have been superseded, and other accounts may be much better,” she said.

“Your financial institution isn’t necessarily going to tell you about that unless you inquire. Picking up the phone or going into a branch is a positive thing to do because it opens up that conversation.”

Ms Montgomery said better options might be available for older Australians, including higher interest rate savings accounts for those aged over 55.

“With home loans, it’s always a time to get a better deal. Even if you did it 12 months ago you should still call again.”

She said many customers believed that switching one account might affect their whole package but this was not true.

Ms Montgomery said making the switch to another bank is easier than ever with new technology and the new institution is often eager to help.

“I often hear people say better the devil you know than the devil you don’t, but there’s a lot of good value out there that you can obtain.”

EXTRACT SOME BANK VALUE

• Start a personal relationship with someone at your financial institution.

• Research the market and present it to your bank.

• Meet the bank’s criteria of a valued customer.

• Check for new account types or bonus deals for certain age groups, such as children or retirees.

• Be prepared to switch — it’s easier than ever.

• Don’t think all your business must be with one bank.

 

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