Hello,

I've been looking at starting a new bank account and I'm a bit confused as to the difference between transaction-style savings accounts and Cash Management Accounts (or Trusts). The only difference I can see is that you get more interest with a CMA but pay more charges.

Anyone know the difference and why you would use one rather than the other?

Cheers
Al.

I looked at this once for someone, and concluded that the higher interest saving accounts seemed better than the CMA's.

Looking at HSBC for example:
HSBC Cash Management Account
Up to $4,999 0.50% p.a.
$5,000-$19,999 4.00% p.a.
$20,000-$49,999 4.20% p.a.
$50,000-$99,999 4.30% p.a.
$100,000-$249,999 4.75% p.a.
Greater than $250,000 5.00% p.a.

compared to:
HSBC Serious Saver
Up to $1,000,000 5.90% p.a.

or
HSBC Online Savings Account
Up to $1,999 0.50% p.a.
$2,000 - $499,999 4.75% p.a.
$500,000 and over 5.65% p.a

CMA's seem pointless ?

When we first came over CBA told us to put our equity into a CMA. When I queried the charges (you only get a few transactions before they charge for each one thereafter) they suggested putting most of the money into a term deposit for 6 months. Eventually the stumbled across the fact that their Netbank Saver actually pays better interest so that is what I have. You have to transfer money to your current account to do anything with it but that is easy.

Because we also have our mortgage with CBA (free banking, gold credit card thrown in too) we have been allowed to set up an off-set account where our savings reduce the interest we pay on the mortgage. So in effect we get the mortgage rate of interest (>7% I think) tax free. So without tieing up those funds we get great rates.

Hi Worzel

For those with a mortgage, the 100% Offset Account is definitely the best option :)

I've come to the same conclusion - I was wondering if I was missing something. I'm guessing that there's some historical reason for the CMAs which no longer applies.

Cheers
Alistair

God Al you're a bean counter and your asking us! ? Theres no hope is there LOL :)

ING do 5.65% on any balance but they also do term deposits (with no charge) which for us worked really well. They do 30, 60, 90 plus ones and obviously the longer and more you put in the better return. It was really simple, even for me :wink: and no risks involved.

If thats NOT what you were asking, i'll shut up now :rolleyes: :P :lol:

Bankwest give 6.4% on their savings account.....

Apart from interest rates the main difference seems to be access to cash, ie CMA accounts have cash cards, internet accounts don't. Or not?

My internet account doesn't have a card, but thats a good thing as its for savings (when we had some LOL) but it is linked to the current account so money can be transfered overnight :)

Hiya Hevs,

As you suspected it's not quite the question I was wanted answered but thanks for answering anyway. It's because Aus has 2 types of savings account: transactional and non-transactional. ING and Bankwest are non-transactional (similar to UK savings accounts) but I'm looking for a transactional account that pays decent interest (something like my Abbey current account in the UK).

The choice seems to be between transactional savings accounts (like HSBC's online saver) and CMAs (like Arab Bank's CMA). So one pays 4.75% with no costs and the other pays 5.25% with costs. As I'm not intending to keep heaps of money in it, I was tending towards the HSBC but I was wondering if I was missing some special feature of the CMA (apart from the possibility that I might be bankrolling Al'Queda).

Cheers
Al :)

Thanks for that but unfortunately I've already taken advantage of their special rate and they're now giving me 5.7%.

Other good rates at the moment are:
AMP Banking easySaver 6.3% (special rate for 6 months - dropping to 5.55%)
HSBC Serious Saver 5.9%
Capricornia CU E $aver 5.85%
EasyStreet easySaver 5.81%
WestPac WP One Sub 5.8%

The Best Term Deposit seems to be BankWest Direct which pays 6.5% for a 1 year term.

Cheers
Al :)

Hiya,

The HSBC Online account mentioned by HSBC has a cash card, which is one of the reasons why I can't see the advantage of the CMA over a transactional Savings account.

Cheers
Al :)

I like the overnight thing here. I had to transfer some money in the UK recently from ING to Abbey and it took 3 days :o

A :)

Same here, only takes one day to get from one account to the other, not 3 days like stupid UK - drives me NUTS when I'm waiting for money from my UK HSBC account.! <_<

When you guys are talking about delays in transfering funds are you talking about international transactions?

It's just that when I transfer money from my nationwide esavings it goes across to my current account instantly I can draw it out straight away. (mind you I found the rest of their banking horrendous everything else took an age to clear)

And for this uneducated brit... what does CMA stand for?

Thanks

jane

I think you're talking about transfers between accounts when both accounts are with the same bank. We (or at least I) are talking about transfers between accounts when the accounts are with different banks. In Aus this occurs overnight (if you initiate the transfer before 4pm). In the UK it typically takes 3 days for the money to clear into the 2nd account.

CMA = Cash Management Account (aka CMT = Cash Management Trust - I think?).

A :)