NZ Herald 10 November 2012

AMy favourite website for comparing many products and services, including banking, is www.consumer.org.nz, run by Consumer NZ.

It gives basic information about all sorts of topics, but you have to pay to join to get more. Still, it’s well worth joining. Consumer does wide-ranging research, including testing products and surveying members.

If I’m planning to buy something, I find the website particularly useful for narrowing down my choices and also for pointing out features to take into account — often things I wouldn’t have otherwise thought of.

On banks, Consumer NZ surveyed more than 13,000 members in August. It found that the small banks — The Co-operative Bank, Rabobank and TSB — all received 100 per cent for over-all satisfaction. Not far behind were two other small banks, SBS and Kiwibank.

Out of the big banks, ASB did best, followed by BNZ then National, Westpac and BankDirect. You’ll be interested to know that ANZ came last — although it still had 86 per cent of customers rating it “good” or “very good”.

The average rating for all banks — 92 per cent — was well up from 84 per cent in 2007. It compares with averages of 78 per cent for electricity companies, 72 per cent for ISPs, and 55 per cent for appliance retailers.

So, despite all the complaints, most people are happy with their banks.

Consumer NZ also rates the banks in specific areas: banking via the internet, smartphones, phone banking and branch banking. Depending on how you usually bank, you may want to note these rankings — which in some cases are quite different from the over-all rankings.

There’s also a separate report on bank fees, and various other useful info, including “Things the bank won’t tell you” and useful tips on switching banks.

On the financial strength of the banks, the best source is the Reserve Bank’s website www.rbnz.govt.nz, which lists New Zealand banks’ credit ratings. Of the main banks, Rabobank NZ has the best Standard & Poor’s rating, of AA. That’s followed by ANZ National, ASB, BNZ and Westpac, all rated AA-minus. Next is Kiwibank with A-plus.

Then comes TSB with BBB-plus and The Co-operative Bank with BBB-minus. SBS doesn’t have a Standard & Poor’s rating, it does have a BBB rating from Fitch, which is similar.

It’s likely that the big banks have higher ratings because of their overseas connections. It’s not all bad having a link to the Aussies or other overseas banks! Still, a BBB rating is said to be “adequate” in terms of “capacity to make timely payment”. So our smaller banks don’t seem to be worrying the credit ratings services.

What else? If you want to compare interest paid by banks, I suggest www.interest.co.nz or www.depositrates.co.nz. If you want to compare mortgage rates, try www.interest.co.nz or www.mortgagerates.co.nz.

The difficulty with comparing mortgage rates is that, at any given time, one bank might seem cheaper because it has just lowered its rates, but other banks might follow the next day with bigger rate cuts.

The only way to judge which bank tends to have lower rates is to look over several years. And www.mortgagerates.co.nz has a tool to do that from 2002.

Go to tinyurl.com/nzmortgg and scroll down to “Advanced mortgage rates comparison”. Click on the banks you want to compare, holding down “Control” or “Alt” — or perhaps something different on your computer — to get several banks at once. You need to also scroll down to see the resulting graph.

A few comments on your specific worries:

• I wouldn’t exclude a bank because it doesn’t have many ATMs. Ask them about it. You’ll probably find you can use other banks’ ATMs. There may be fees, but they might not amount to much.
• Does having branches matter? How often do you go into yours? I almost never do.
• On the competence of bank staff compared with post office staff, I can’t see why one would be better than the other for front line work. For more complex services, I expect every bank has staff with more expertise.

AIt seems that many of our attitudes to money are set from childhood. We don’t necessarily do what our parents did — we might do the exact opposite. But by the time we are young adults, we’re either spenders or savers, and it may not be easy to change that.

In your case, why should you change? You sound perfectly happy with your cheaper meat and wine, and it seems that you’re generous to others. So good on you.

The worry, of course, is for the spenders who don’t have an income to match their spending.

AIf the pair haven’t yet been warned, hopefully this Q&A will do the trick.

Asked if Inland Revenue keeps track of people who are in the public eye for making gains, a spokesperson replied — predictably — “We cannot comment on specific situations due to taxpayer confidentiality, including commenting on any assessment as this would depend on the specifics of an individual taxpayer.”

The spokesperson does say, though, “If a property is purchased with the intention of resale to make a profit, or as trading stock for a business, there are likely to be tax implications on any proceeds, irrespective of how long a seller has held that property or how any proceeds are distributed.”

Your comment about the possibility of the brother and sister being “caught” several years down the track has credibility, as you are a chartered accountant. But Inland Revenue wouldn’t comment specifically on that either, saying only, “Each case is considered on its individual circumstances, and as tax laws can be complex, customers should seek advice regarding their obligations.”

Hopefully the brother and sister, and anyone else in the TV programme who made a gain, will do just that.

And while we’re issuing warnings, the department adds, “As part of our compliance programme, we have been working to raise awareness about income from property transactions and to educate people across the country about their tax obligations. We will continue to concentrate on areas of potential property speculation, such as land banking, off-plan sales and property swaps.”

As a first step for information about tax on property gains, people can go to www.ird.govt.nz/property/index.html. For more detail, go to tinyurl.com/taxonproperty for an easy-to-read guide with lots of examples.

AYou can put a lump sum into KiwiSaver, but it’s treated like all other deposits. That means the money can be withdrawn before retirement only if you are buying a first home or experience financial hardship, serious illness or permanent emigration, or upon death.

If your daughter is sure she wants to use the money to buy a first home, there’s no good reason not to put it in KiwiSaver. But if she might use it for something else — perhaps to start a business or set herself up overseas or do an advanced degree — she should keep the money somewhere more accessible.

If she likes the way her KiwiSaver money is invested, she could ask if her provider has a similar non-KiwiSaver fund. Or, if she expects to spend the money within a few years, bank term deposits should do the trick.