8 Money Saving Secrets that banks will not tell you

When was the last time you went to a bank?

When it comes to banking, there are usually 2 schools of people. One would put 100% trust in the bank, and the other would find 'loopholes' to maximise 'returns in the bank. We belong to the latter.  Having been on the other side, there are a few 'secrets' that banks would not openly state in their terms and conditions. Even if stated, it is generally in the very fine print. 

1 You can break a fixed deposit

If you had put a new deposit in the bank, you would probably receive about 1-1.2% interest for 12 to 15 months. Today, most banks are paying 2%, with some as high as 2.3% for the same tenure. While 1% extra may not seem as much, for every $100,000, that is a difference of $1000.

Some banks may impose a penalty, while others may waive it if they choose to break. Some banks will return your FD with interest at a lower rate if you have met their minimum period (usually quarterly). The rates provided are usually board rates.

Nonetheless, a fixed deposit does NOT necessarily mean you need to place it till maturity, as you have an option to break it.

Example

Place $100,0000 in May for 1 year, interest 1.2%

Break in Aug, no penalty, no interest received 

Place new FD $100,000 for 1 year, interest 2.2%

Loss of Interest from May to Aug (3 months) - $300

Gain of Interest from Sep to Aug (9 months) - $900

Net Gain $600

As you can see, something it 'pays' to break Fix Deposit.

2 Do not auto-roll your fixed deposit

When you open a fixed deposit, you will generally be asked if you would like the principle and interest to be rolled over or transferred back to the account. Some will opt for the former as they deem it more convenient. However, most may not be aware that they would usually be given board or non-promotional rates when they roll over the fixed deposit. This rate would usually be lower than the 'promo' rates offered to new funds.

3 Old funds can be new funds for fixed deposit

Since most banks only give promo rates for new funds, you may be wondering how to convert these old funds to new funds. One of the ways is to place your deposit in another bank. According to the best deposit rates guide, some banks are pretty competitive in offering FD rates. Another more troublesome way is to withdraw the whole deposit and transfer it to another bank before transferring back. Some banks frown on this and would add additional conditions to limit this.

4 You can reprice your housing loan

Do you know that you can ask the bank for a reprice once your lock-in period is over? You can always switch your loan to another bank if the banks refuse. Some banks will even offer to foot the additional expense such as lawyer fees if you change banks. 

Like Fixed Deposit, it is best to reassess the housing loan once the lock-in period is up. More often than not, the rollover terms could be worse off than the current rates.

5 Credit Card fees can be waived

The first year is usually free when you first apply for credit cards. However, annual fees will be charged in subsequent years. You can usually get these fees waived if you are a heavy card user. Banks would earn commissions from these cards transaction, and the annual fee is just a small portion they earn, especially if you are a big spender.

6 Freebies for Credit Card Applications

Some credit cards offer freebies when you apply. These freebies will be extended to those new to the bank or not currently holding any of the bank's cards. Another interesting thing to note is that such freebies are usually available from 3rd parties aggregator sites such as Moneysmart or Singsaver

7 Funds sales charge can be 'discounted'

If you are interested in investing in Unit Trust through a bank, the sale charge usually ranges from 3-5%. It is hardly surprising to see bank staff recommending this option when you head to the bank to open an FD. You can always ask for a discount on this. Otherwise, head to fundsupermart to purchase the funds at a 0% Sales charge (with a flat proceeding fee) 

8 You can negotiate for better pricing

You will be surprised that bargaining can be a daily affair in the bank. From Fixed Deposit rates to investment returns to loan charges, you can practically bargain for anything with a 'fee'. The caveat is that your bargaining power will only increase according to the size of your bank account.

There you have it, 8 money savings secrets that banks will not tell you. 

We add a bonus to the list- Be nice to your banker. The nicer you are, the more willing they will share these 'secrets' with you!

Disclaimer

This is not an invitation to invest. Do consult your financial advisor for any financial advice.