By Peter Switzer
This is a no BS look at the best financial products out there. You can use this guide to make a switch or to compare your super fund, your home loan, your credit card, your personal loan, etc.
Best Super Funds
This comes from SuperRatings and here are the top 5 funds over 5 years:
Now here’s the performance over 3 years:
And below is a one year showing for super funds and what you can see is that the funds that have consistently done well have been HOSTPLUS – Balanced, Australian Super – Balanced, and CareSuper – Balanced. Also note that Cbus – Growth has been up there over three and five years, which I think is a better guide than simply a one-year good performance. Intrust Core Super also deserves an honourable mention.
Here I will spotlight the cheapest loans and you can decide if you want to pay more for any bells or whistles that you can add to the ‘price’ or interest rate of a loan.
If you want to apply online, U-Bank has a 3.69% variable home loan and the comparison rate — the rate you should look at to compare rates — is 3.69%. Bank Australia has a 3.65% home loan but the comparison rate is 3.66% and this deal ends on June 30, so it could get a little dearer.
For a walk-in loan Aussie has a 3.69% home loan with a comparison rate of 3.7%. For a loan you can arrange over the phone my Switzer Home Loan is 3.89% for both advertised and comparison rates, which would put us 9th on the Rate City’s comparison table for cheapest home loans.
Clearly, if you are paying more than 3.89%, you are not interested in not wasting your money!
Important Info: The comparison rate is the advertised rate plus any fees or charges that push up your monthly repayments and therefore increases the real interest rate you are paying!
More Important Info: Financial experts will always say the past results are no guarantee of future results but in the absence of a crystal ball that tells us what lies ahead I like fund managers who have a consistent knack of doing well.
By the way, all of the super funds mentioned above are not outrageous chargers and so they are not rip-off merchants.
If you put good returns and reasonable charges together you have a great formula for building super wealth in your super fund!
Cheapest Credit Cards
The cheapest credit card I’ve found is the McGrath Pink Visa Card with an interest rate of 8.99% on purchases, balance transfers and cash advances. And half of the annual fee of $40 goes to McGrath Foundation. Also, by paying your account’s outstanding balance in full every month you can make use of up to 55 interest-free days on purchases. The card is issued by Community First Credit Union if you are interested and you can apply online.
Check your interest rate on your credit card as they can be as high as 20% plus but these might come with benefits such as frequent flyer points. You need to do your homework on whether the high interest rates are worth paying.
Of the well-known cards, the Virgin Money Low Rate Credit Card and Bendigo Bank Low Rate Mastercard come in at a rate of 11.99%, which looks about the best rate from this kind of financial institution.
A mob I’ve never heard of called Harmoney have a 6.99% fixed rate loan which has a comparison rate of 7.69%, and these rates are pretty good for personal loans.
Be careful of advertised rates because one new lender has an 8.42% fixed rate but when you add in fees the comparison rate goes to, wait for it, 10.79%!
There are lots of personal loans around 10% and many higher. If you have a good credit history you should be a good chance to get the money from the cheaper lenders in the market.
Interestingly, Latitude loans are, according to Finder.com.au, 13.99% fixed but the comparison rate is a whopping 15.19%! I guess Alec Baldwin doesn’t come cheap!
If you don’t go out and pursue the lowest cost financial product possible then you can only blame yourself if you find you have a life where money is too tight to mention and you’re living simply in the red!