Posts Tagged ‘savings accounts’

Cyprus Ultimatum Threatens Banking System

Thursday, March 21st, 2013

How soon things change. No sooner had Europe appeared to settle down, promising better conditions for a slowing Australian economy and lower costs of funding on international wholesale markets, when the chaos kicks off again.

Cyprus has dominated international headlines this week, after an unprecedented move to impose a one-off tax on savings worth up to 10%. Banks were closed as people rushed to withdraw money, and are to remain closed until next Tuesday.

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Banking in Australia and Great Britain: A Comparison

Thursday, August 30th, 2012

It’s not unusual for Aussies to shadow the UK’s developments, and in many cases, to learn lessons from them.

Firstly, there was the MPs expenses scandal, which struck the UK back in 2009. This prompted a small probe by Australia’s Daily Telegraph into the practices of Canberra MPs.

But it’s only really struck notoriety in 2012, with the report into MP Craig Thomson and the revelations about credit card misuse by a number of government departments.

There’s also the case of Australian banks. Having witnessed the collapse of Northern Rock in the UK and the considerable bailout afforded to the Royal Bank of Scotland, large Australian banks have kept revenues and profits high.

There will be few who argue against the merits of strong banks, particularly given the fate of European and American counterparts. Many of these are now under investigation for alleged manipulation of the inter-bank lending rate during the inception of the global financial crisis.

But for many, it’s hard to accept the banks’ ability to pull in record profits during a global financial crisis, when many are living on the breadline and trying to negotiate their way through a stuttering economy.

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Longer, But Better Days: Australians Adopt British Work-Life Balance

Thursday, June 28th, 2012

Changing Office CultureShowering at the office? Shopping online during the day? Facebook and Twitter time?

It seems that Aussies have begun adopting a British work-life culture that extends far beyond normal office-hours, but they seem just fine with it!

UK-based company Mozy has found that the working day has extended to 12 hours as employees keep tabs on email and work accounts from 7am in the morning until 7pm in the evening.

But with that comes more flexibility, as workers have more freedom to perform ablutions at the office, do their shopping online, conduct their finances online, or spend time on social networks.

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The best way to set-up and maintain your Superannuation fund

Wednesday, March 28th, 2012

Superannuation is a method of financially preparing yourself for your retirement. Both yourself and your employer can contribute to it over time and this money is then invested into a variety of  appropriate investments such as shares, property, savings accounts and government bonds.

When you retire, or qualify for your superannuation due to disability or death, you will receive the money (less charges and taxes) either as regular payments made periodically, a lump sum payment, or a combination of the two.

The Superannuation Guarantee came into effect on July 1, 1992, making it compulsory for employers to contribute to an employee’s superannuation fund.

The minimum amount of the contribution is 9% of an employee’s wages. This excludes overtime, fringe benefits and leave loading.

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Concerns Mount for Australian Banks

Friday, December 2nd, 2011

Consumers might have been forgiven for thinking that a timely boost was set to come their way in time for Christmas.

It is widely predicted that central interest rates, which had remained untouched since April 2009, will fall for the second consecutive month when the Federal Bank’s committee convenes next week for the final time in 2011.

But the untimely downgrading of Australian banks by credit ratings agencies this week has put a new complexion on the immediate forecast for bank funding, irrespective of whether a central rate cut is announced or not. Consumers are set to lose out when they may have expected to benefit.

Downgrading

Standard & Poor’s have downgraded a number of major banks worldwide, including Barclays, HSBC, Goldman Sachs, UBS in Switzerland and the Bank of America. In Australia, the Commonwealth Bank, ANZ, National Australia Bank and Westpac all fell by one grade to AA[-], the agency’s fourth-highest rating. Macquarie Group was cut by two levels to BBB, a grade which anticipates a level of risk from adverse economic conditions.

What these reductions do is heighten insecurity for banks to lend to one another. This, in turn, raises the cost of lending as banks insure themselves from that elevated level of risk.

Such costs will no doubt be absorbed by consumers through less competitive savings and loan rates. A central interest rate cut may prove welcome only insofar as it prevents loan rates from rising.

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