My experience opening an Australian bank account as a Singaporean resident

With the AUD/SGD dropping to a multi-year low on the back of a commodities meltdown, what better way to take advantage of this then to go for a 16 days holiday in Australia. Besides, Australia is an amazingly baby-friendly nation ( much more than Singapore) in terms of places to bring the Baby to. Milk and baby food is also darn cheap, being about 40% cheaper than Singapore. And so i thought i would be "saving" some money. BUT, my wife just had to change darn lot of money just in case we ran out , especially when the currency is cheap now. Naturally, there was excess and bringing back to Singapore to change back to SGD or just to keep it in a milo tin was a "SIN" to me. Money should always work hard, not rest and slack!Money as the spread going to the money changer should always be minimized too!

So the last week of the holiday, i opened an Australian bank account. Here are some lessons learnt.

1) As a Singapore Citizen who is just a tourist like me, DO NOT ever give an australian address to the banker to open an account for you. This is a major misconception! You do not need an australian address at all. If you give an australian address, you will automatically be deemed to be staying in Australia and your withholding tax rate will be  46.5% ( top marginal tax rate 45% + Medicare levy 1.5%)  on your savings account interest earned per year.  If you give a Singapore address, you will be deemed as a non-resident and withholding tax is only 10%. I reiterated many times to the banker that i was a non-resident just so he opened the account correctly. 

2) Go to the major banks like National Australia Bank (NAB), Commonwealth Bank of Australia(CBA), Westpac and ANZ. I was just passing by a community bank called Bendigo bank and thank GOD i didn't open with them as the banker asked me for an australian address and didn't even know the withholding tax rate. My suggestion is to go to an asian banker in one of the major banks as he or she has dealt with many asians opening bank accounts in Australia and so will be very experienced. 

3) Open the account at least 5 working days prior to your departure from Australia. The reason was because the atm card needs around 5 working days before they can be collected from the same branch you opened with. 

4) You have to have some activity in the account or else the account will be in dormant status and it will be swept to a government account. According to the asian banker i spoke to, he said it was HELL to get back that money with lots of paper work and time ( think months). He wasn't too sure about the span of time before dormancy starts but told me to open 2 accounts and transfer some funds between them once every 6 months just to be safe. As i can't have a peace of mind not knowing something for certain, here it goes:

Apparently it's 3 years ( i don't know if the 7 years one has be approved) and the Australian government takes about half a billion a year from these dormant accounts! That's free money!

So what's benefits

I opened the NAB reward saver account which currently has an interest of 2.85% pa, ( use to be 3.05% as can be seen in the pic below), After WHT of 10%, the net interest rate will be 2.565% pa (use to be 2.745%), which is better than any banks savings here and even better than our Central Provident Fund -Ordinary account of 2.5%. And this along with the belief that the AUD will appreciate in time to come.Going back to Australia is also certain and this will act as a holiday fund there. 

Doing business with car dealers - Protect yourself

Not only are cars blood sucking liabilities to get in Singapore, the process of getting one is also fraught with many dangers. 

Examples of car dealers who infamously made the news for various reasons:

Volks Auto, KS Automobile, Galaxy carz, Cars Today, Mich Automobile,.Go google them!

Common danger
The original car owner sells a car to the car dealer for $32,000 . The car has an outstanding loan of $30,000.The car dealer gives you $2000 first and takes the car, promising you to handle the paperwork of settling the remaining loan of $30,000.
The car dealer then finds a car buyer. Car buyer pays a deposit(or worse the full amount!) and takes over the physical car, believing mistakenly that having the physical car as 'collateral' gives one a peace of mind.
Car dealer then runs away.
Original car owner : Still owes the bank the loan of $30,000, is liable for any fines that is incurred and loses the use of the car.
Car buyer : Loses deposit, car will be towed away as it is owned by the bank due to outstanding loan.

Possible ways to reduce risk
For original car owner : Settle your loans by yourself before selling the car to the car dealer. Besides, some car dealers like to charge an admin fee for doing such work. I was asked for $500 before for the admin fee which i found ridiculous for such a trivial job and of course i dropped this dealer. Do not let him take the car after receiving the deposit. After settling the loan by yourself ( you can't transfer ownership until the loan is settled), make sure that there is a transfer of ownership to the car dealer at LTA or if the dealer is an electronic service agent, apply for a transaction pin using your Singpass and then do it at the dealer's premises. On the spot at LTA or at the dealer's  premises, receive the full amount then transfer the ownership.   Only after this, then pass the car to the car dealer.

For car buyer: Paying a deposit seems like a common industry practice which i kind of disagree with. Negotiate for a lower deposit to reduce risk or  a complete safer way is to request the car dealer to go down to LTA to do a transfer of ownership of the car and only then pay him in full the amount once transfer of ownership is done. If the car still has outstanding loan or is not owned by the car dealer, the car cannot be transferred. If he is a scam, he will surely not agree to this. If he is an electronic service agent (ESA), you can ask him to get a transaction pin  and transfer the vehicle ownership to you at his premises.Again if the car still has outstanding loan or is not owned by the car dealer, the car cannot be transferred.

There are actually a lot of permutations of how to get cheated in the car industry but the moral of the story is : The ownership status recorded with LTA and when you hand over or receive the money is very important and always get an invoice. This principle also applies when dealing with direct car owners or buyers.

Other car articles
Buying a brand new car- What i learnt
Buying a brand new car- The minimum considerations