Savings in Australia, what to do with it.

LeonieSH

Hi
I lived in Australia many years ago and managed to save some money while I was there. It used to earn good interest but is now costing me money as the interest is super low and the account maintenance fee is higher. 
I don't know whether to keep it there (anyone know of particularly good savings account?) or whether to transfer back and add on to my mortgage offset. 
Not sure the best time (good exchange rate at the mo?) or method to transfer back either (the cheapest)
Help very much appreciated
Thanks

steampowered

These are your options:
1) Savings account in Australia
2) Savings account in the UK
3) Mortgage offset
4) Top up your pension
5) Stocks & Shares ISA

Your post only considers options 1-3. You should consider options 4 and 5.

If you top up your pension, you can get tax credit on your contributions. This is worth an instant 20% uplift if you are a basic rate taxpayer (more if you are a higher rate taxpayer). Plus, pensions grow on average something like 6-7% per year.

If you invest into a stocks & shares ISA, you can choose a simple stock market tracker fund. The stock markets have historically grown on average 7-8% per year, so that will almost certainly be more profitable for you than letting the money languish in a savings account. 

The best method of transferring will be to use a specialist currency transfer service. I like HiFx. The banks tend to give you bad exchange rates on top of adding fees. 

Brie

I know nothing about the accounts available in Australia but it does make sense to use the money to reduce your mortgage.  

Can you find out how much the Aussie bank would charge to convert to ££ and transfer?  Likewise what if it is all done by your mortgage bank?? 

I have an account in Canada and know that there are set charges for different levels of money transfer that that bank (TD) will charge to get the cash to my bank here in the UK.  $50k is the point when the charges seem relatively insignificant - at least to me.  

I've not managed to get my head around the independent FX companies and would, for safety, prefer to stick to a organisation who already has me as a customer.

Brie

steampowered said:

The best method of transferring will be to use a specialist currency transfer service. I like HiFx. The banks tend to give you bad exchange rates on top of adding fees. 

@steampowered
what is it that you like about HiFx?  how long have you been using them and for what value of transfers?  don't need to be too specific it's just that there are so many companies when you google it's hard to know what's what!

steampowered

Brie said:

@steampowered
what is it that you like about HiFx?  how long have you been using them and for what value of transfers?  don't need to be too specific it's just that there are so many companies when you google it's hard to know what's what!

I used HiFx for a number of years when I was an expat for transfers ranging from about £2-20k. I would have no problem using them for larger transfers. They are a big company. 

When you are comparing them with banks, please remember to look at the exchange rate as well as the fees. Giving you a less-than-market exchange rate has the same effect as charging you a fee.

When you take exchange rates into account, I worked out that it would cost me about £100 more to convert £2,000 into local currency with HSBC rather than with the currency broker. If the Op is transferring more than that she could easily find that her bank is in effect charging her hundreds of pounds to do the currency conversion. That was a few years ago mind but I doubt it has changed very much. 

Gers

I've just used Currencies Direct to transfer 3 x £10k to family in Australia.  Simple and fast. Each received approx $AUD 18.5k.

PRAISETHESUN

Which bank do you use in Aus? I have accounts with Comm Bank and ING and neither charge me any fees as long as I transfer money between them each month. Odds are as a non-resident you won't be able to open any new accounts, so your best bet is probably to remit it back to the UK and then do something constructive with it - the ideas discussed above are good ones.

I'd recommend something like Wise for the currency conversion and transfer - low fees and a very good exchange rate.

xylophone

You might consider opening a Starling Bank account and arranging for the transfer of your Australian savings into it?

https://www.starlingbank.com/


https://wise.com/gb/blog/starling-bank-international-transfer

What do I need in order to receive an international transfer with Starling?

To receive money from overseas into your Starling account, you’ll need to give your recipient all the same details as above. This means your IBAN, SWIFT/BIC code and your standard account number and sort code.

Once received you have the option to save, invest, make a pension contribution, back your fancy in the 2.30 at Epsom....... 

penners324

No need to open a Starling bank account to receive money. All banks (unless it's Monzo) have IBAN facilities.

Tassie_Devil

As a nonresident account holder the bank will be withholding either 10% of the interest or 47% depending on what address they have on record for you:

https://www.ato.gov.au/Individuals/Investments-and-assets/Interest,-unfranked-dividends-and-royalties/

Maybe use somebody like Wise to transfer it back to the UK.