How much are you paying to have your money stored ?
Having recently done some looking around, I was surprised at the number of people who actually PAY to have their money in a bank.
A bank invests the money that you store with them, and get paid interest for it.
The investment could be loan for a house, in which case that person would be paying interest on that the mortgage. The investment could also be in shares, or even a movie, in which case they might get paid a % of the profits.
It rarely matters how your financial institution invests the money, the main thing is that they do, and they make money with your money. So why do people PAY their bank accounting fees?
Let’s make a comparison.
A Credit Union is a not-for-profit financial institution. That is, they are owned, by their members, and the board of directors is generally voted in by it’s members in a democratic way. A credit union does not exist to increase it’s profits, but instead to provide credit at reasonable rates, and other financial services to its members
A bank however is a for-profit financial institution, whose primary activity is to act as a payment agent for customers to borrow and lend. Banks are usually listed on the stock exchange, and instead of being customer orientated, are most focused on share holders, and profit margins.
Community CPS – (a local credit union) vs the Commonwealth Bank
At CPS most people will be in the ‘Level 2’ tier being either under 25 yrs of age, or having over $5,000 in the account. Which allows you to make $13 worth of account transactions a month, such as Eftpos, ATM, etc…
At Commonwealth Bank you PAY $4 a month to have unlimited ‘free’ Electronic access transfers… But they still sting you for ATM transactions, EFTPOS, etc.. Or vice versa, you can have free ATM access, but pay for Internet banking. Either way, you still have to PAY to have the bank look after your money.
Personally I like the idea of a credit union better and if you haven’t already, I suggest checking to see if your financial institution and plan is the best for you.
Disclaimer : I am not a lawyer, nor accountant, and the information on this website, while researched, does not claim to be true. If you are in doubt, please contact an appropriate professional.