Australian Bank Account (High Interest Earned)

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allenk

Registered User
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I have just been into one of many Banks here in Australia, I will not be working here but I will be flying through here every 6 weeks or so on Business.

The interest rates are 5-6% and paid monthly on the entire balance of the account. Not like Ireland I believe that you don't pay any kind of DIRT. As I am not a resident I was informed I may have to pay a witholding tax of circa 10% on interest earned. There is no management fees or catches. You just leave the money in for as long as you want and take it out when you want.

The only slightly negative things is that it is AUS$20 to send money home to Ireland (Pretty Standard) and the cash card you are given is only good in Australia.

I can get paid directly into the account from my company in AUS$ so it will not cost me anything to lodge money in.

I am not to up to date on the exchange rates flucuation over the past year or so but it seems pretty stable for the moment.

Can anyone tell me is there anything bad about this or am I missing something...

Cheers in advance,

Allen
 
From a quick review, AUD has fared well vs EUR over 5 yrs or so.See [broken link removed] Having said that, there has been murmurings of overheating in the Oz economy, and it's performance is closely linked to China, so any economic fall-off there will impact on Oz. Some concerns also focus on the Oz housing market overheating as noted here in the Wall Street Journal.
 
It's not that there is anything bad but you do need to be aware of the FX risk if you are transferring back to Euro's. In the last year the Eur has weakened by about 12% against the AUD. You also need to be aware of the tax implications. The interest earned on the account will be liable for income tax here. I thought that Ireland had a double taxation agreement with Oz that meant you didn't have to pay the 10% at source. But even if you do, you are entitled to a credit in Ireland for the amount of withholding tax. Just beware that because the account is outside the EU, the tax you pay on the interest is at your marginal rate.
 
I forgot to mention I'm working outside of Ireland.

That wall street article is interesting, I read an article from an Australian paper and they said that the annual demand for housing in Western Australia is at a shortfall, this is not from investments its the large influx of ex pat workers to get the much needed minerals out of the ground from construction of plants etc to mining itself. But then again from talking to locals around the place here on the east side thye seem to buy if they can regardless of the price.
 
sounds like ireland circa 2005,

then the same arguments were used about irish housing, demand outstripped supply because of all the immigrants coming in to work in the booming economy, it maybe a year or two off yet but a wobble in china will hit australia hard, i also heard that australia is getting expensive for everything even groceries, it has very high wages for low skilled jobs and also tight immigration into low skilled areas
 
Joe,

Your right about Australia being expensive to live in. Sydney and Melbourne are the 6th and 7th most expensive cities to live in followed by Perth and Brisbane being the 13th and 14th!! This was in the 'The Courier Mail' this morning. Tokyo being on the top of the list.

I cannot figure out how they are doing so well! These high wages for low skilled workers are mostly from foreign companies making billions from the local resources such as coal, oil and gas etc. If they were to run out I'd say the place wouldn't survive a week!
 
There are also concerns about serious overlending in the property market...(God you'd think they'd learn), as well as lending supports provided by the Oz government, which only adds fuel to the fire.
 
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