Why Savings accounts if you can Offset?

Hi all,

I've recently signed the contract for my very first property. I'm now organising PM's, insurances, etc, etc.

I've also set up a Mortgage Interest Saver Account (MISA, what they call it), which is basically an offset account linked to my home loan account.

My question is, given the advantages that accounts like this (MISA) provides, why would you keep money on a savings account? I've got my ING account but now I can't find a reason why to keep money there. Interest on these accounts (ING, NetBank Saver) are taxed, whereas offset accounts aren't.

Do you still use a savings account even if you can add that money to your offset account? why?

thanks!
 
Personally i have absolutely no idea unless you need the interest to cover your day to day living.

Even with a fixed rate loan some lenders offer an offset account and i can see no reason why you wouldnt utilise this.
 
With all savings accounts, the interest will be less than the going rate of interest on loans of the day.

There has been comparisons done between the two that suggest the difference is bugger-all, but generally I'd say that using an ING account is pretty much pointless when you can use an offest and decrease the debt you have.

Less debt means better cashflow, more equity and so on - a stronger financial position all around.

To me it seems a waste of time to be saving $1,000 while there is still $1,000 of debt; especially when the savings rate is 8% when the loan interest is say; 8.5% or more.
 
^^ yep - and if you're on the 30% tax bracket, your savings rate of 8% is only effectively 5.6% after tax... so the comparison is even worse.
 
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