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What's the catch with NAB Gold Banking?

Discussion in 'Finance & Banking' started by EMP, 10th Jun, 2008.

  1. EMP

    EMP Active Member

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    I was just reading about NAB Gold Banking and it really seems like the ultimate bank account. All sorts of transactions, other banks' ATMs, debit card, purchase protection insurance, etc. And as long as you deposit $5000 a month it's all absolutely free, as far I as I can see. If you have a net salary of $5000/month or more you'd be doing that automatically. What I'm still trying to figure out is: what's the catch?

    As I understand it, other banks would charge NAB a fee if I use their ATM with my NAB card. Overseas transactions would surely cost them even more. How can they afford to not recover these fees from me, the customer? What's in it for them if I basically don't pay them anything for this account, ever? How do they benefit from me depositing $5000 every month? It's not even a minimum balance, just a deposit.

    As they say, "in any business transaction look for the fool - if you can't see him, it's you!" OK, that might be an overly cynical way of putting it, but I completely agree that in any transaction you need to see how each party stands to benefit. Obviously NAB is doing this to make money somehow, but without seeing how I'm a bit wary of this "too good to be true" offer.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Not really any catches that I can see - provided you do indeed have $5000 per month to deposit, I think it's a very good account.

    ... otherwise $12 per month is a pretty hefty fee to pay for a personal transaction account.

    Also:

    - no OS ATM fees doesn't mean that much when their hidden exchange rate fees really cost a lot (the $4 - $5 ATM fee saved per transaction is still a good start though).

    - their OS travel insurance is not necessarily worth much - you'd need to check the PDS carefully to determine exactly what it covers. When I looked into these "free" insurance products earlier this year I found they were generally extremely lacking. Better than nothing though.

    ... but if you don't travel OS much, these are moot points anyway. Like I said - I think it is a very good product (assuming you have $5000 per month to deposit).
     
  3. eddyl

    eddyl Well-Known Member

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    Do you think you could cycle your money through the account? I.e Deposit your salary approc $3000 a month, with savings you have in cash each month $2000?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    They don't say how much you have to maintain in the account (no minimum balance), only that you need to deposit $5000 per month - which can be from a variety of sources.

    Personally I couldn't be bothered trying to set up some arbitrary monthly deposit system to avoid the fees - either just pay the fee, or choose a cheaper product.
     
  5. AsxBroker

    AsxBroker Well-Known Member

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    Hi EMP,

    Like Sim said $12 per month, this'll probably cover the cost of operating your account. I think ANZ had an unlimited transaction for $5 per month. Not sure if they still have this account available. Though saying that, you might want service which another bank maybe better for. It all depends on what you need.

    Cheers,

    Dan

    PS Before making an investment decision you should weigh up all your options. Speak to you favourite banks before doing anything!
     
  6. EMP

    EMP Active Member

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    Oh, I understand how they would make money with the $12/month fee. :D The questions is how they would make money without it if the customer deposits $5000 per month, every month. I suppose they might be hoping that you won't make that deposit for a few months and then they'll make back all those ATM fees, but that still sounds like a shaky business model. They'd have to have more than that hope up their sleeves.
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I think you might find that transaction accounts like these are largely loss-leaders designed to attract customers to which they can then up-sell other products and services (credit cards, car loans, home loans, margin loans, financial planning, etc etc).

    ... and may well be paid for by those people who don't deposit enough and actually pay the $12 per month fee!
     
  8. EMP

    EMP Active Member

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    Ah, now that's an interesting point! I think it fits: they probably figure that if they find someone who does have a regular $5000/month net income chances are they can sell them something profitable. They're probably right, too. :)

    Thanks, Sim!
     
  9. DaveA

    DaveA Well-Known Member

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    im sure there happy to give away as much in fees at the moment to just get deposits... if your having $5k a month deposited your really only ~$90k so there targeting people with money....

    i agree good account, but as with everything theres advantages and disadvantages...
     
  10. boringbanker

    boringbanker Member

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    Hi there,

    there is no catch with this account. It is a great account designed for the high income earner who would be the sort of client NAB would like to attract. Basically the thinking is: the more high net worth client you have the better is their chances of increasing cross-sell especially loans and financial planning.

    Another reason is if you're going to have at least $5K going through the account each month, chances are some of that money will stick (bank talk for staying in the account). Therefore, cheap deposit fund for the bank reducing their cost of funds.
     
  11. Crusher

    Crusher Well-Known Member

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    I looked quite seriously at this account when i was choosing a new bank only a few months ago.. I was with ANZ for the unlimited account for $5 and had the V2 plus account, offering 6%p.a with 6 free transactions a month.

    Now the reason i wanted a change, was to find an account i could get a good interest rate on, and pay all of my bills / direct debits for investments and everything, from ONE single account.

    Anyone, long story short.. I signed up with Suncorp for there unlimited account, still costing me $5 a month BUT, i now get:

    Unlimited transactions

    FEE FREE ATM withdrawls for any ATM outside of QLD (good for me since im in NSW) but that doesnt include the private ATM's you'll see at pubs n what not, i just use the major banks ATM's to be on the safe side.

    Savings account (only internet banking available though) but offers 7.15% and i have all my debits for investments come out, can bpay all of my bills and transfer anything to external accounts, all free of course.

    So i have my salary directly deposited into this savings account.. put everything on credit and transfer a couple of hundred or so over into my normal account to withdraw of a week if i want to go out and do whatever. So simple, and seemed to be the best account for me.

    Only problem is.. Im 2 hours from the nearest branch :eek: haha, but for now, works for me lol
     
  12. willy1111

    willy1111 Well-Known Member

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    I was looking around for an account back in April before a trip to Europe, and I chose this one (the NAB Gold Banking).

    I withdrew money from overseas ATM's and wasn't charged any ATM Fees or currency conversion fees. When I withdrew $300 Euro, they did the exchange on the day so when I looked at my statement, it would show as a withdrawl of about $500 AUD. Whilst I didn't calculate the exchange rate exactly it looked pretty close to me with our dollar purchasing about $0.6 odd Euro. The amount withdrawn from my account in AUD changed slightly from time to time as I imagine the exchange rate varied from day to day.

    I've kept the account and think it is great. I also have a NAB Isaver linked to it. Which is NAB's version of a high interest internet account. I don't think the interest is as high as some of the other internet providers but it is better than a standard account, and convenient as I can just transfer from the Isaver to everyday account on the internet and it is there instantly.