Time to move your money?

Cash rates have reached a record low. This could mean real benefit to home owners but presents challenges to investors. RYAN SEALEY explains what to be thinking about to get the most out of your money.

The Reserve Bank has just cut interest rates by 25 basis points to a cash rate of 0.75%. This is the lowest cash rate on record.

Most banks haven’t automatically passed on the full rate cut to homeowners. But that doesn’t mean that you can’t benefit from this latest change. In fact, it’s an excellent time to be having a look to see what is available.

There are two options to getting the best deal.

The first is to talk to your existing lender and see if they can do any better. Given that they are usually keen to hold onto your business, there is a good chance they will come to the party on a better rate. This approach is relatively simple because it avoids all of the headaches associated with a change of bank.

Staying with your current bank can make it simple, but it doesn’t necessarily mean that you’ll be getting the best rate available to you. For that, it pays to be looking a bit further afield.

Shopping around to other lenders takes a bit more work in the search, and then in the administration of the change, but this can be well worth it.

While these record-low interest rates should present a win for people with mortgages, it’s not such great news for investors who have money in the bank. They’re likely to lose out here.

Again, investigating your options here is the right tactic, but there are a few tricks of the trade to consider.

If you intend to keep your savings in a bank, you will want to ensure that the upside of interest is ongoing. That is, will any change you make actually be beneficial in the long run?

If you are an investor, the bank might not be the most sensible place to park your money while these rates are so low. There’s a host of options that could be a better fit for you, depending on your needs and circumstances.

For both homeowners and investors, these record rates do magnify the importance of being on top of your finances.

For many, the options and complexity can be paralysing.

It really shouldn’t be this way. This is a great opportunity to take advantage of a unique environment and make solid financial gains to establish financial freedom and move you towards that lifestyle that you’re working so hard towards.

Enlisting the guidance of a good financial adviser will make sure you are getting the most out of every aspect of your finances, be that the best deal on your investments or debts, and also your insurances, taxes and superannuation.

Ryan Fennell, Shane West and Jarrod Owen of The Fennell West Unit Trust trading as Fennell West are Authorised Representative(s) of GWM Adviser Services Limited ABN 96 002 071 749, an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies. Licensee No. 230692. Any advice in this article is of a general nature only and has not been tailored to your personal circumstances. Before acting on this advice, you should consider whether it is appropriate having regards to your personal objectives, financial situation and needs.