How rounding up works
A growing number of everyday bank accounts in Australia are offering ’round up’ as an optional feature.
- Every time you buy something using a debit card linked to your everyday account, the amount withdrawn is rounded up to a set figure.
- It can be the nearest dollar or the nearest five dollars, ten dollars etc.
- That amount above the purchase price of your item is transferred to your nominated savings account.
For example, if you buy a sandwich that costs $7.50 and have chosen to round up to the nearest dollar, $8.00 would be debited from your everyday account. $7.50 pays for your sandwich and the remaining 50c goes straight into your savings account. If you have chosen to round up to the nearest $5, $10 would be debited with $7.50 paying for your sandwich and $2.50 going to your savings.
Using our sandwich example, if you buy your lunch three times a week, and round up to the nearest $5, you could add $390 to your savings each year.
Because the sum is relatively small, you’re less likely to miss the extra cash coming out of your everyday account – and the saying goes, ‘every little helps’ when it comes to saving money.
Check the fees
Always do your homework and look at any fees and conditions associated with your bank accounts. If you are being charged a fee, or there are any extra conditions imposed, it could affect any additional savings you make.
Source: moneysmart.gov.au
