With the OCR at a record low of 3.5%, it’s a great time to invest in a new house as you can get a low mortgage rate, but those with savings investments get the short stick with lower interest rates. Investing definitely has its ups and downs.

Are investments ever absolutely safe? Cars and houses can depreciate, stocks can fall and businesses can have rocky times, so of course not. However, having savings in the bank is a pretty safe investment to have, and believe it or not, you can still get great, competitive interest rates. While the market average interest rate is 3.55% from the big banks in New Zealand at the moment, there are online banking services which can give you an on-call interest rate of 4.50%.

How do they do this? Online banks have no branches and no tellers, meaning smaller overheads. Smaller overheads means small margins need to be made to cover costs, so instead of contributing to a bank branch’s power bill, you get a higher interest rate (meaning more interest earnings in your account). Nice to know that in these financially challenging times you can still get a high interest rate, isn’t it?

Everyday we’re swamped by savvy new advertisements from banks to help us save our money wisely, in fact television advertisements for New Zealand’s banks are some of the most artistic and memorable on our small screens. There is a lot of financial jargon out there, but what does it all mean?

Here’s an easy guide on the benefits of opening a savings account:

Many New Zealand banks are now offering online saver accounts which earn you over 8% interest per year, just by keeping your money in your account. As a great savings incentive, some banks will keep this high interest rate for you only if you don’t make withdrawals from your savings – and if you do, you will decrease your interest percentage for that month. This means it is in your best interest not to splurge, and a great way to restrain yourself from spending the savings you have put away for something special.

If you had just $1000 in your savings account, you could earn over $80 every year to keep your money there – talk about making your cash work for you! Most savings accounts cannot be linked to EFTPOS cards, so you won’t be tempted to hastily buy those shoes, or those few extra drinks that you cannot afford with your normal budget.

Because you can manage your savings entirely online, without paper statements or tellers, a lot of New Zealand banks offer online savings accounts don’t have any fees.

If you want to earn even more interest than with a standard online saver account, you can opt for a term deposit account. This means your money is invested with a bank for a pre-determined amount of time, and will earn you a fixed interest rate for that period. This is great for anyone who won’t need to call on their savings unexpectedly.

Even if the bank you belong to doesn’t offer the best interest rate available, you can still earn the highest interest rates with another bank like RaboPlus, without a messy break-up with your existing bank.

If in doubt, make sure you always talk to the professionals and make an informed decision. If you are trying to figure out which bank will work best for you, find one to suit your needs.

Image from Flickr.

Further to my post a few days ago on the benefits of Internet banking…

Are there security risks if I bank online? Well yes, and no.

New Zealand banks have recently admitted that they are open to attacks from the latest trojan technology – capable of getting past even the best two-factor authentication (a method that uses two forms of verification to confirm a customer’s identity). Some of the threats to you when you bank online are:

• Phishers: Fraudsters who obtain your personal details through a variety of means, such as sending you an email that appears to be from your bank and provides a link to a fake banking site.
• Trojans: Software programs which disguise themselves to look like an application on your computer.
• Viruses: Software programs which replicate themselves and can destroy valuable information on your hard drive.
• Worms: Self-replicating programs which spread from your computer to others connected to it.
• Scams: Job scams or other fraudulent means of convincing you to receive or send money via their bank account.

In defense of banks, they do put a lot of time and energy into ensuring your privacy and security is maintained. Your banking information is encrypted so that third parties cannot view your activity or access your information, and there are other online safety nets in place too.

You can help ensure your own Internet banking security:

• Take care when banking online in a public place: Make sure there is a padlock symbol in the lower right corner of your browser, never save your login details, and be sure to log out when you are finished. Also watch for shady characters lurking nearby.

• Protect your computer: Use virus protection software and install a firewall on your PC. Remember to download updates regularly too!

• Use a hard-to-guess password: Make sure you are the only one who knows your password and don’t disclose it to anyone! Banks will never ask for your password by phone or email, so ignore emails claiming to be from your bank asking for login confirmation.

• Beware of hoax emails: If you receive an email that appears to be from your bank or another financial institution, delete it immediately. Do not open any attachments and do not offer your personal information.

• Keep in touch with your bank: Notify your bank straight away if you notice unusual activity in your bank account or suspect someone else has used your password.

Stay safe with online banking security solutions and protection for your PC.

Image from Flickr.

Online banking is arguably the easiest, simplest, least-hassly, cheapest way to manage your money.

What’s so great about banking online? The benefits of Internet banking are many. Often, charges are lower for online accounts and Internet banking facilities are offered at no extra cost, making it a great option for individuals and businesses. Online banking services allow you to:

• Check your account balances and statements online
• Transfer funds between accounts
• View up to date account activity
• Manage your accounts from anywhere in the world
• Make bill payments online and set up automatic payments, direct credits or wage payments
• Get access to detailed information about your account

Who provides the best Internet banking? Compare the competition and find online banking options in the NZS.com directory. Check out online banking information for New Zealand banks:

• ASB Internet banking
• BNZ Internet banking
• Kiwibank Internet banking
• National Bank Internet banking
• Westpac Internet banking

Find these and other New Zealand banks in the NZS.com Directory.