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Interest Income FY2006/7

July 20th, 2007 at 04:22 am

I took a day of annual leave today - in theory to have some quiet time while DS1 was at school to sort out my paperwork for my tax return. I didn't get as much done as I'd hoped - I had to call ps146 in the morning to do a "role play" assignment via telephone as part of the DFS(FP) course I'm doing, so I didn't get started on sorting and filing until after lunch. And then DW had to go to the school early in mid-afternoon to collect DS1 as he had a bit of a chest cold which had triggered an asthma attack. He had a mild temperature (~1 deg) when he got home, but he seems OK this evening. He's still a bit wheezy and having puffs of Ventolin every few hours, but hopefully going to bed early and a good night's sleep will seem him better by morning.

Anyhow, I did manage to add up all the interest payments I'd received last year. Aside from a couple of joint accounts (where I have to include half the interest on my tax return, but the accounts are actually used exclusively by DW these days) I had a total of nine interest bearing accounts in use last year. A couple of them are linked to my margin lending accounts, and some were online accounts used to earn interest on my 0% CC balance transfer arbitrage activities. All together I earned a total of $1,783.98 in interest last financial year. I'll probably end up paying 30% income tax on that interest. Although I had various tax deductions (superannuation salary sacrifice, margin loan and rental property interest) to reduce my taxable income, I also received some unplanned capital gains during the year due to takeover activity affecting my stock portfolio. I still estimate that my total taxable income will end up within the 30% tax rate band.

Copyright Enough Wealth 2007

A Nice Opportunity for Beginning Investors

July 2nd, 2007 at 11:16 pm

It's a pity that I already have several online savings accounts and mututal fund investments, because the new offering from rabobank looks very attractive. They offer an online savings account with no fees or minimum balance with an interest rate of 6.6%, and from this account you can invest in wholesale mutual funds for a low entry fee of only 0.75% (compared with up to 5% entry for retail funds going direct or via a planner, or 0% for a retail fund investment via a discount broker). They are offering 0% entry fee, but only until the end of July. But the 0.75% fee is still good value as it gives access to wholesale funds (which usually charge lower management fees than their retail fund equivalents) with a minimum investment of only $250.

I'd try out this account and fund investment option if I didn't already have more accounts than I know what to do with. They do offer the account for use with a DIY Superannuation account (SMSF), but I'll have to check carefully how their costs and range of available funds compares with accessing mutual fund investments via e*Trade (I already have an e*Trade account setup for use with our SMSF). One benefit of making out SMSF mutual fund investments via e*Trade is that eSuperFund (which administers our SMSF) has access to transaction data from our e*Trade account. If we invested for our SMSF via Raboplus we'd have to send copies of all the relevant financial info to eSuperFund each year.

I was also thinking about opening a Raboplus account for DS1 and/or DS2, but unfortunately you can't open a raboplus account if you're under 12, so the kids will have to make do with their St George bank accounts and Commonwealth Bank 'dollarmite' savings accounts. It's funny how some banks and Superannuation funds have no problem with opening accounts for a minor (with an adult having authority to operate the account), while others either don't handle accounts for minors at all, or insist on the account being opened in the name of the adult trustee(s).

Copyright Enough Wealth 2007

Esanda online savings account is no more...

November 16th, 2006 at 06:14 am

Well, it had to happen. With the proliferation of online savings accounts all offering the same high interest rates, some of them are struggling and going under.

I'm not too fussed as I also have an ING direct online account which I tend to use more anyway. The Esanda one gave me $25 when I opened the account - the main reason I opened it. Probably a lot of other folks did the same thing.

When announcing the closure they informed me that their parent company (ANZ bank) has already opened an ANZ online account for me! But I'll NOT be taking up their kind offer to activate this account by taking in 100 pts of ID to an ANZ bank to open a regular bank savings account with them - they charge $5 per month in fees!

As the ANZ online account ONLY works with an ANZ bank account, it's not really competitive with ING, which lets you link to ANY existing bank or credit union account that you have.