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A Question for you all

May 9th, 2008 at 05:55 am

Because I cannot get into the forums area again to ask this question, I will ask it here.

On another blog, a saver is getting up to 8.25% interest on her Australian money. Does anyone know how that converts to the U.S. Dollar. Here is the bank I am talking about

www.abetterdeal.com.au

I am just wondering if I should be utilizing this online banking for its interest rate, depending on how the interest rate converts.

I hope I didn't confuse you all. Anyone knowledgable in this area, please chime in, cause I am confused here. Thanks, and feel free to post this in the forums, cause I am unable to.

Posted in Random Musings | 8 Comments »

8 Responses to “A Question for you all”

  1. merch Says:
    May 9th, 2008 at 06:09 am

    It's almost at parity. 1.06 AUD = 1.00 USD

    source: http://finance.yahoo.com/currency

  2. campfrugal Says:
    May 9th, 2008 at 06:33 am

    So, I would be getting an extremely higher interest rate if my money was sitting in an Australian Bank paying 8.25% than sitting in a U.S. Bank paying 3%. Is it safe, I wonder, to have my money in an Australian Bank? Hmmm

  3. luxlivingfrugalis Says:
    May 9th, 2008 at 06:38 am

    The only thing I'd be concerned about (I know next to nothing about this so this may be totally off the wall) is what are the tax implications on those earnings. Would you have to file out some special form at tax time next year?

  4. merch Says:
    May 9th, 2008 at 06:49 am

    You are alos taking an added risk. You have currency exposure. So, if the US starts to raise inerest rates, there will be more demand for USD and it will cost more AUD to purchase a dollar.

    In other words, you could be losing some of that interest earned to currency fluctuations. I believe the USD as at its low and well start strengthening from here. All it takes is the ECB (European Central Bank) to start lowering banks then the dollar strengthens and the price of oil will start to retreat.

  5. shiela Says:
    May 10th, 2008 at 01:53 am

    Australian dollar is right now fluctuating around 0.93 -0.95 US dollars.
    The bank you are talking about is called Bankwest, they have the highest rate online saving here right now, even better than ING's 7.90%. I have both online account but I personally only put a little bit of money in it because our mortgage is at over 8.60% right now so tend to put most of our money in the mortgage redraw account.
    As far as I now, they started not long ago (maybe less than 5 years ). It's main office is in Western Australia (probably why it is called Bankwest). I've had my account for a year now and have not had any problem but then I'm in Australia, I don't know how it would work for overseas customers.

  6. campfrugal Says:
    May 10th, 2008 at 04:00 am

    I wish ING had a 7.9%, but it is only around 3%, that is why I was so curious, cause that is a lot of extra interest in Bankwest, if our dollars are about the same.

  7. shiela Says:
    May 10th, 2008 at 04:45 am


    Also, I don't know how it works in the US but here we have to pay tax on the interests we earn from such accounts.

  8. campfrugal Says:
    May 10th, 2008 at 06:22 am

    Yes, we pay taxes on our earned interest income also.

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