Warning on Bank Offset Accounts
Are you sure that your deal from your bank is what you think?
Recently a large bank acknowledged errors over a number of years in short paying its customers with offset accounts (not one of the big four). Fortunately, for its customers, it agreed to back-pay the shortfall.
Whilst the principle of an offset account is beneficial to some (but not all), is it what you expect?
Whilst a fundamental principle is that interest earned is used to reduce (i.e. offset) interest payable, it is never that simple.
Is the interest earned rate, the same as the interest payable rate?
Do you know what both rates are?
Do you check the calculation? – bank above got it wrong!
Could the perceived tax advantages be achieved by investing in the name of a non-working spouse, who receives a higher rate on a fixed term deposit?