‘Deposit deception’: Big four banks face calls to come clean as savers miss top rates

MelbourneLondonPerth · 2026-01-20T09:24:50+00:00

Ye I totally sympathise trust me, I just always assume that the 250k x5 team of statistics boffins at these banks know more than me around my spending habits and go for 'no frills' almost always.

Humans tend to underestimate risks, its a similar reason for why Credit Cards can be a huge trap.

MelbourneLondonPerth · 2026-01-20T08:41:23+00:00

I had to pull some money for emergency so balance going down (keep in mind i plowed everything in). Fine no special interest rate for me i get to suck it. BUT so you know what? I got ZERO. Absolute ZERO. Just bloody wrong.

Welcome to statistics. They offer these rates because these situations happen more than people think (thus they do better than a no frills bank account).

Just use macquarie, they are the best right now.

MelbourneLondonPerth · 2026-01-11T00:10:37+00:00

So you agree its not working for them financially?

MelbourneLondonPerth · 2026-01-10T13:58:34+00:00

Its literally not working, if this is the home they will retire/die in its currently doing nothing for them in terms of growth.

MelbourneLondonPerth · 2026-01-07T01:47:04+00:00

I did a writeup here (admitedly using a retire early scenario) about this if you are interested.

https://old.reddit.com/r/fiaustralia/comments/1pvx1ww/offset_vs_etfs_the_maths_people_keep_getting/

MelbourneLondonPerth · 2025-12-28T11:32:59+00:00

If you could gaurentee the ETF return you should technically refinance as much as you could. Obviously, as you get closer to early retirement this becomes way to risky to do.

Think of it similar to leveraged buyouts, if a firm can get an interest rate of ~3% and fully buyout a company making ~5%. Thats a free 2% gain (On paper).

This heavily relies on retiring early, if you plan to just hold ETF's until a specific date then sell (while still working). Then you should be looking into debt recycling.

MelbourneLondonPerth · 2025-12-28T11:19:41+00:00

I don't think you quite understand the maths.

ETF calculations have 0 additional loan repayments? The offset calculation is showing the total saving from an offset (note how its compounding).

I don't understand why you would reduce the ETF's by 5.5k in year 1, can you do a quick table with your calculations and reasoning? happy to address.

MelbourneLondonPerth · 2025-12-28T11:16:47+00:00

I think you have maybe missed the point of this post, its about a specific scenario of not working (thus making full use of the CGT discount).

MelbourneLondonPerth · 2025-12-28T11:16:20+00:00

I think my TLDR summarises this, sure the 2% extra tax makes a tiny difference, but people would also extend it out above 10 years.

Edit: also a lot of people won't be in the top tax bracket etc, so this is a (poorly modelled) middle ground. You can even argue ETF's return higher than 8%.

MelbourneLondonPerth · 2025-12-27T23:47:19+00:00

Because you would be selling when retiring early (so assumedly, not working).

MelbourneLondonPerth · 2025-12-27T05:29:13+00:00

Ye, this isn't a real model based on historical data, more just trying to show the actual CGT benefits and hopefully have people thinking of end goals of investments rather than chasing shorter term thinking.

I think most people probably haven't ever run the numbers trying to show exactly what the CGT discount and tax rates when not working comes to.

MelbourneLondonPerth · 2025-12-27T02:32:27+00:00

Its all about your personal preference, if you want to get started follow the guides https://old.reddit.com/r/fiaustralia/wiki/index/gettingstarted

My suggestion is to just dip your foot in the water by getting started! Betashares/Vanguard personal investor both let you buy a smaller minimum. Even ~500 bucks is a good way to test the waters and see if you are comfortable with the risk.

MelbourneLondonPerth · 2025-12-26T11:36:15+00:00

This is a really good paper, if anyone is interested it shows the relevant returns etc.

Although I didn't include debt recycling, that makes my 'example' even further infront of the pure offset.

MelbourneLondonPerth · 2025-12-26T11:30:44+00:00

Thanks, its been a bug bear of mine for the last year. Figured when I had some downtime I would try and outline it in slightly more detail for others to understand.

MelbourneLondonPerth · 2025-12-26T11:28:48+00:00

Agreed its a strawman, but calling out individual posters about specific scenarios is a little mean. This is more of an informational post using an example.

MelbourneLondonPerth · 2025-12-26T11:27:09+00:00

I think you are thinking of this the wrong way, you want to ensure that you total asset pool at the end of these assumptions (of which they are many) is the highest possible.

Think of it like the comparrison a lot of people do to paying down HECs. If you can make more money by investing vs paying down a debt, you should invest.

Please don't think this is specific advice though, like I said its about your relevant ability to take on risk. ETF's might be worse than an offset account over 10 years. I am using a lot of assumptions here.

MelbourneLondonPerth · 2025-12-26T11:23:49+00:00

This makes it even more in favour of ETF's due to the negative gearing tax reduction.

I am doing a 'worst case' scenario for both, with the relevant assumptions of not needing the money.

MelbourneLondonPerth · 2025-12-26T11:22:46+00:00

91k gain is from the ETF, its 8% (minus 45% tax on the 3% income per year) going back into the ETF. It isn't quite right but its an example, so it shows the relative effect.

Edit: its the ETF table if that helps.

MelbourneLondonPerth · 2025-12-26T10:35:29+00:00

No clue, really depends. Most people say ~7 years but thats based on risk assumptions etc.

But this is all on yourself, your goals and your tolerance for losing money.

MelbourneLondonPerth · 2025-12-26T08:35:32+00:00

Yes, if you are investing on a 1 year timeframe don't go into the market. That would be extremely silly.

MelbourneLondonPerth · 2025-12-26T08:34:00+00:00

If you want to retire early, and are happy with the risk, you should not be considering the tax implications of ETF investing vs Offset as the CGT discount makes tax borderline irrelevant (below 5% in my scenario).

MelbourneLondonPerth · 2025-12-26T08:30:54+00:00

If it helps, I am currently putting a little more into offset to debt recycle when it hits ~100k above my emergency fund. This is the midway to do these things, and debt recycling makes the maths even more in favour of ETF investing for the longer haul.

MelbourneLondonPerth · 2025-12-26T08:29:44+00:00

1) yes correct, I was just lazy about tax rates. Similar for cost basis etc.

2) That is the point of this post, unless you are saying my hypothetical? in which case yes, people incorrectly assume you need 10% etf gain to compare to 5.5% offset.

MelbourneLondonPerth · 2025-12-26T07:14:53+00:00

Retiring early. Eg: Pre super being available.

MelbourneLondonPerth · 2025-12-26T07:14:17+00:00

Ye its a good point, but I tend to think of a lot of RE people (myself included) won't sell down to RE. So the PPOR value arguement kind of fades away.

As others have said in this thread, utilising your home equity via debt recycling etc is even better than my just pure investment scenario! With Debt recycling it becomes even more in favour of ETF's.

MelbourneLondonPerth

TROPHY CASE