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  1. #1
    Legend peat's Avatar
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    Default Australian Term Deposits

    So I am unable to make term deposits in Australia because I have a NZ address and the bank (WBC) tell me its due to a NZ law change which means they cant disclaim effectively because I am not there.
    Sounds suspiciouly like Aussies dumping poo on NZers again.

    Anyone here have recently opened Term Deposits in Australia recently - yes I know you're lucky to get 1% but it would be good to get something.
    I noted they were quite happy to have a six figure sum sitting in a cash account earning nothing.

    Thanks for your help. I really do want to start investing in Australia but tbh I am finding paperwork hurdles quite challenging and may give up if I dont make a breakthrough soon. I have a portfolio approach so need to have some funds in fixed interest options -
    For clarity, nothing I say is advice....

  2. #2
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    Quote Originally Posted by peat View Post
    So I am unable to make term deposits in Australia because I have a NZ address and the bank (WBC) tell me its due to a NZ law change which means they cant disclaim effectively because I am not there.
    Sounds suspiciouly like Aussies dumping poo on NZers again.

    Anyone here have recently opened Term Deposits in Australia recently - yes I know you're lucky to get 1% but it would be good to get something.
    I noted they were quite happy to have a six figure sum sitting in a cash account earning nothing.

    Thanks for your help. I really do want to start investing in Australia but tbh I am finding paperwork hurdles quite challenging and may give up if I dont make a breakthrough soon. I have a portfolio approach so need to have some funds in fixed interest options -
    I have been in the BT cash management fund (in $A) for a long time. BT still have an Auckland address on the correspondence they send me. So I imagine as an NZer you could still put money into that? Don't ask what the interest rate is though! BT did send me a tax summary for the last quarter which indicated I am still earning something! Ironically I think this bit of BT is still owned by Westpac. So it could be that 'your' branch of Westpac actually do not know what they are doing regarding overseas currency stuff.

    Here is my own case in point re overseas funds incompetence by Westpac NZ. Westpac NZ has/had a policy of cashing overseas cheques directly into NZ dollars so that you can draw on your funds immediately. Of course as a customer you pay dearly for this service with an extremely unattractive exchange rate conversion factor (they don't highlight that bit to you). However, last time I tried to use this service the bank teller was very nervous. They were worried about the exchange rate changing between the time my overseas cheque was put into my account and the time when the bank actually converted the cheque from UK pounds to NZD. This was of course a self created risk of their own 'overseas cheque for cash' policy. In the dim distant past your overseas funds were frozen until the actual cheque was cleared. The actual currency risk of this transaction was likely to be 100-200 basis points, whereas the exchange rate conversion charges gave them a profit margin of some 1000 basis points. So the chances of them actually losing on this transaction was virtually nil. In the end they refused my cheque because there was a chance I could completely clear out my current account of all funds before the cheque went through and leave them out of pocket. This was notwithstanding my current account had more than twenty times the value of the cheque I was trying to cash at the time, and I had never had any irregularities with my account in the past. If they were really worried about the cheque not clearing, why not put a stop on the funds until it did clear? This whole affair IMO was a complete footshot by Westpac, entirely created by their own in house rules. Needless to say I no longer trust Westpac as a New Zealand bank for anything to do with overseas currency, although I have found BT largely satisfactory over the years.

    Have you tried another bank?

    SNOOPY
    Last edited by Snoopy; 21-05-2020 at 03:26 AM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  3. #3
    Legend peat's Avatar
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    Thanks for responding Snoopy.
    I'd been thinking that all the Australian banks would be operating under the same legislation and that the chances of anyone of the majors being different was slim to nil. HOWEVER, I rang ANZ Australia and it did take about an hour but we opened a current account which earns interest and has no fees (WBC Oz charged a monthly fee and no interest at all). Once I identify using the local branch of ANZ (with whom I have an account already) then I will be able to open TD's.

    So there was a major difference between their responses not only with opening the account - WBC made it very difficult - but the ability to invest for fixed interest. The returns are very low I know but thats not the point!

    Which also raises the questions whether WBC Oz are spinning lies or ANZ Oz is breaking the law. Unless there is some subtlety which ANZ deploy to satisfy the law, I don't know. But , yeh , weird.

    Anyway I immediately moved nearly the entire sum into ANZ and WBC can be called Pillocks , not Pillars.
    For clarity, nothing I say is advice....

  4. #4
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    WBC may be being ultra careful as wasn't them that got 'caught' with 23m AML breaches or similar

  5. #5
    Legend peat's Avatar
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    Quote Originally Posted by Jay View Post
    WBC may be being ultra careful as wasn't them that got 'caught' with 23m AML breaches or similar
    its a good suggestion Jay but surely the money is already in the account and was put there by CBA , at what point does the laundering occur if it was tainted. Because I am not asking them to funnel it through to anywhere else.

    Anyway I am happy with the way things are heading with ANZ
    Thanks for the story Snoopz .
    For clarity, nothing I say is advice....

  6. #6
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    Quote Originally Posted by peat View Post
    Thanks for the story Snoopz .
    Wait there is more, it gets worse. Before I go on I should add that I respect that Westpac is a private business and they have the right to choose what kind of business they do and with whom.

    Initially Westpac said they would cash my cheque but they would have to courier it overseas to be cashed at a cost of $100. I guess they thought that by putting an outrageous price on the transaction they would put me off. I reluctantly agreed to this. However they changed their mind when they found out my 'salary' was not being direct credited into my account. I have been self employed for over twenty years, so I have no 'salary'. I also pointed out that I had deposited several thousand dollars into my account that month and tens of thousands over the year. I did all my NZ business through that account. I told them the IRD recognised this money as income and so should they. However, the teller was very adamant that this money did not count as income because it was not a 'salary'.

    Now I can't influence any unwritten policy on how Westpac wants to do business. But I do object to them changing rules 'on the fly' - after I agreed to cash a cheque at an outrageous price. Why make a false offer to me to cash up a cheque front me if they had no intention of ever going through with it? I told them I would leave the bank if they didn't want to do business with me and they said fine go ahead. I was flabbergasted after being with the bank for over twenty five years that they were prepared to lose my custom so easily.

    All I could think was that they had a cookie cutter pattern of customer they wanted to deal with and I no longer fitted that cookie cutter pattern. They wanted someone with a big mortgage (mine was paid off) who spent up big on their credit card (I cancelled my credit card with them after it inexplicably failed while I was on a trip to England). No explanation was ever forthcoming as to why my Westpac credit card suddenly stopped working while overseas. Fortunately I had another card from a different bank or my trip would have ended in chaos!

    As I no longer fitted that cookie cutter profile (the teller confirmed with the manager on site that they didn't want to transact with me so it wasn't just a rogue teller), and I had asked to do something 'difficult', (cash an overseas cheque), it was good bye! Of course the teller didn't know I was a Westpac shareholder as well. Not sure if this was a signal to sell my Westpac shares, because they were being very obviously un-co-operative with a long standing customer, or buy more because they were stopping costly unprofitable transactions across the board!

    SNOOPY
    Last edited by Snoopy; 21-05-2020 at 05:47 PM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  7. #7
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    Quote Originally Posted by Snoopy View Post
    Wait there is more, it gets worse. Before I go on I should add that I respect that Westpac is a private business and they have the right to choose what kind of business they do and with whom.

    Initially Westpac said they would cash my cheque but they would have to courier it overseas to be cashed at a cost of $100. I guess they thought that by putting an outrageous price on the transaction they would put me off. I reluctantly agreed to this. However they changed their mind when they found out my 'salary' was not being direct credited into my account. I have been self employed for over twenty years, so I have no 'salary'. I also pointed out that I had deposited several thousand dollars into my account that month and tens of thousands over the year. I did all my NZ business through that account. I told them the IRD recognised this money as income and so should they. However, the teller was very adamant that this money did not count as income because it was not a 'salary'.

    Now I can't influence any unwritten policy on how Westpac wants to do business. But I do object to them changing rules 'on the fly' - after I agreed to cash a cheque at an outrageous price. Why make a false offer to me to cash up a cheque front me if they had no intention of ever going through with it? I told them I would leave the bank if they didn't want to do business with me and they said fine go ahead. I was flabbergasted after being with the bank for over twenty five years that they were prepared to lose my custom so easily.

    All I could think was that they had a cookie cutter pattern of customer they wanted to deal with and I no longer fitted that cookie cutter pattern. They wanted someone with a big mortgage (mine was paid off) who spent up big on their credit card (I cancelled my credit card with them after it inexplicably failed while I was on a trip to England). No explanation was ever forthcoming as to why my Westpac credit card suddenly stopped working while overseas. Fortunately I had another card from a different bank or my trip would have ended in chaos!

    As I no longer fitted that cookie cutter profile (the teller confirmed with the manager on site that they didn't want to transact with me so it wasn't just a rogue teller), and I had asked to do something 'difficult', (cash an overseas cheque), it was good bye! Of course the teller didn't know I was a Westpac shareholder as well. Not sure if this was a signal to sell my Westpac shares, because they were being very obviously un-co-operative with a long standing customer, or buy more because they were stopping costly unprofitable transactions across the board!

    SNOOPY
    I should add that I too had difficulties depositing foreign cheques with BNZ and it's pretty safe to say all banks are the same. In addressing to the original post's problem of issuing term deposits abroad, I would say there are 2 major factors that changed everything:

    1) The CRS "Common Reporting Standard" put out by the OECD, for which all banks in NZ and Australia (and some 110+ nations around the world) had change the playing field in international banking. It meant no bank could willingly conduct international transactions without tax scrutiny. If you mentioned you were a NZ citizen and had a NZ address to the Australian bank branch, well you opened up a can of worms because they have to verify your tax status. After all the whole intent for CRS came about from the media exposure of the Panama Papers and tax free havens, rich elites hiding money in secret bank accounts around the world etc. So now that game has come to an end and even places like Switzerland had to cave into CRS so their historic bank secrecy laws no longer apply.

    2) The FMA "Financial Market's Authority" of NZ. They are the regulatory framework that all banks and brokers in NZ must be licensed to and authorised in order to have a business in NZ. If the overseas foreign bank or broker is not licensed by the FMA, AND they are serving clients that live in NZ (again, mentioning you have an overseas address = can of worms), then according to NZ law, they are breaking the LAW! This covers areas such as the AML "Anti Money Laundering Act" which on any transaction over $10,000 - the banks much go through more checks and hoops to ensure the transaction is legit from clear sources, and in the case with the Australian banking, to ensure the person wanting the transaction can be verified. Using a foreign address generally means 'no' from the bank teller's point of view. Even the bank manager would not be wrong to be hesitant. AML is met by taking your passport ID or DL and it's forwarded to the police for background checks.

    @ Snoopy: I think the key trouble why Westpac mislead you is that they won't simply "cash" a foreign cheque in one go. All my foreign cheques I deal with through BNZ are deposited into their respected foreign currency and there's a 2 or 3 week stand down period before those funds could be drawn out. It's shown on their computer screen on the posted date and the cleared date with funds showing respectively how much I can withdraw before the cleared date. Also I never try to exchange rate the foreign cheque on the spot, as you say, the rate fluctuates so much throughout the day that it leaves them with this excuse not to do so. So, I think if you did things in 1 step at a time, the end result would be no problem.

    You mentioned the fees? Well BNZ for USD cheque deposits going into USD is $9 USD (or $15 NZD PER CHEQUE!) It's horrendous and fortunately, i've been able to structure our deposits outside of NZ. A good place to start is with the US where the banks there are not part of the CRS and certainly don't give a rats ass about NZ's FMA. Virtually all the US banks provide 'mobile self check deposits' meaning you use a smartphone and with their banking app, you take a photo of the front and back of the chq (after endorsing), type in the amount and click deposit and voila! FREE!!! You wait a week to see if it's cleared, no fees, no bank teller to give you the run around, etc. I'm certain BNZ does something similar AFTER I present them with foreign cheques.

    Totally agree, I too don't fit into the bank's 'cookie cutter' type of customer. The sad part is even if I wanted to be like the typical customer in NZ, I could not be because of how I structured my investments.

  8. #8
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    Quote Originally Posted by SBQ View Post
    @ Snoopy: I think the key trouble why Westpac mislead you is that they won't simply "cash" a foreign cheque in one go. All my foreign cheques I deal with through BNZ are deposited into their respected foreign currency and there's a 2 or 3 week stand down period before those funds could be drawn out. It's shown on their computer screen on the posted date and the cleared date with funds showing respectively how much I can withdraw before the cleared date. Also I never try to exchange rate the foreign cheque on the spot, as you say, the rate fluctuates so much throughout the day that it leaves them with this excuse not to do so. So, I think if you did things in 1 step at a time, the end result would be no problem.
    SBQ, I would have no problem if Westpac, like the BNZ, put a foreign cheque into escrow for two to three weeks while it was cleared. That is entirely sensible policy on behalf of any bank. The problem is that, with Westpac, this option is simply not available. Instead Westpac is touting the benefits of your foreign cheque deposit being available immediately as cash. It was entirely Westpac's choice to implement this policy. It is nothing that I asked for.

    If they are worried that someone might take advantage of their policy and clean out the cash before the cheque is cleared, well, why have the policy to start with? Shooting yourself in the foot is a perfect analogy for this kind of corporate behaviour.

    The 'benefit' for Westpac customers now is that overseas cheques cannot be deposited at all, unless Westpac can recover the cost of doing so by charging you for other services in other ways (i.e. you fit the Westpac Cookie Cutter Customer pattern).

    SNOOPY
    Last edited by Snoopy; 22-05-2020 at 08:52 AM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  9. #9
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    Quote Originally Posted by Snoopy View Post
    SBQ, I would have no problem if Westpac, like the BNZ, put a foreign cheque into escrow for two to three weeks while it was cleared. That is entirely sensible policy on behalf of any bank. The problem is that, with Westpac, this option is simply not available. Instead Westpac is touting the benefits of your foreign cheque deposit being available immediately as cash. It was entirely Westpac's choice to implement this policy. It is nothing that I asked for.

    If they are worried that someone might take advantage of their policy and clean out the cash before the cheque is cleared, well, why have the policy to start with? Shooting yourself in the foot is a perfect analogy for this kind of corporate behaviour.

    The 'benefit' for Westpac customers now is that overseas cheques cannot be deposited at all, unless Westpac can recover the cost of doing so by charging you for other services in other ways (i.e. you fit the Westpac Cookie Cutter Customer pattern).

    SNOOPY
    My experience with BNZ is they tell me that a lot of work is done now to clear foreign cheques. In the past before the FMA and CRS came in, it was very straight forward (treated quite similar to NZ domestic cheques). But now the extra work load is significant and not straight forward and to be quite certain, the branch managers view it as a hassle and find it easier to just tell the client that they won't clear the cheque when the banking as a whole does allow to clear foreign cheques. On amounts (I believe) over $5K they have to go through paperwork such as police checks, bank checks to see if the issuing bank is not on the ban list of some dodge practice. All this regulation increases the compliance cost for banks and quite simply as my bank manager has told me, the real losers are the legit customers trying to do business.

  10. #10
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    Quote Originally Posted by peat View Post
    So there was a major difference between their responses not only with opening the account - WBC made it very difficult

    Which also raises the questions whether WBC Oz are spinning lies or ANZ Oz is breaking the law. Unless there is some subtlety which ANZ deploy to satisfy the law, I don't know. But , yeh , weird.

    Anyway I immediately moved nearly the entire sum into ANZ and WBC can be called Pillocks , not Pillars.
    I think the myth that all banks are the same needs to be exposed. Take a look at Westpacs own HY2020 results presentation, and go to page 42.

    https://yourir.info/resources/af4e33...ssion_Pack.pdf

    The NPS score is a little complex and further information on how it works can be found here:

    http://www.exerciseindustryawards.co...ity-entry/nps/

    You can see that by their own data Westpac in NZ is consistently rated the worst for customers promoting their service to others and this has not changed over the last four years. If you are a big business Westpac is good. In Australia as a Consumer they have been middle of the pack, although they are now at the bottom of the customer service scale. But in NZ you would have to be a sucker for punishment to keep dealing with Westpac.

    This survey is consistent with my experience. I have found Westpac NZ offerings are usually more expensive than comparable offerings from other banks and the service is significantly worse. Westpac used to offer the benefit of a more extensive branch network than other banks. But with recent branch closures this is no longer true, Even the once superior money machine coverage of the country has been culled. The other banks are by no means perfect. Nevertheless, I would invite any Westpac New Zealand customer to approach any other NZ based big four bank and see what you have been missing out on.

    SNOOPY
    Last edited by Snoopy; 23-05-2020 at 06:43 AM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  11. #11
    Ignorant. Just ignorant.
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    I opened Australian bank accounts with ANZ and CBA back in 2011/12. I emailed them explaining what I wanted and eventually made appointments to go and see them at the appropriate branches when I was next passing through Sydney. There was a bit of to-ing and fro-ing about it all, but in the end, we managed to work our way through the AML/ID process.

    I know that that's not particularly helpful at the moment, but I suspect that there will be a trans-Tasman travel bubble some time toward the end of this year.

    in Australia I run transaction accounts - debit card only as neither ANZ nor CBA will issue credit cards to a non-Australian resident - as well as both term and currency deposits. I investigated opening sharebroking accounts, but they too are limited to Australian residents.

    I made sure that I signed up for online banking at the same time, and can happily shuffle various currencies in and out of Australia, to and from various places, with no issues, as well as setting up term deposits.

    As far as the Australian term deposits go, as they mature they're moved off into the Russell Investments Australian Government Bond ETF (RGB.AX). Same currency, same asset class, better liquidity, better credit rating, and better yield.

    Just remember that what you're trying to do is not an every-day run-of-the-mill thing for most bank staff - the "secret" is to find someone competent - which is often easier said than done in the world of financial services.

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