Though no longer available, the ANZ Online Investment account was an easy way to take your first steps in the share market
This product is no longer available.
The ANZ Online Investment account works like a regular online savings account, but rather than leave your money in your account to be used by ANZ as a regular deposit account, your money is invested in a fund which tracks the Australian Stock Exchange (ASX) 200 Index.
This means your returns are tied to the performance of the 200 biggest publicly listed companies in Australia, including heavyweights like Atlas Iron, Bluescope Steel, Boral, Coca-Cola Amatil, David Jones, JB Hi-Fi, Lend Lease, Mirvac, News Corp, Qantas, QBE Insurance and more.
How does the ANZ Online Investment account work?
Learning how the stock market works is challenging and is not for everyone. On the flipside, investing in the share market in Australia is a good way to diversify your assets and make good profits.
This is where the ANZ Online Investment account has an advantage. You simply deposit money into the account and then at 12:45 pm AEST the next day they are used to buy units in a fund.
You can monitor your investment from your Internet banking like you would a regular account and then withdraw your money using ANZ Internet Banking.
The account will start out with a simple transfer process. You will send money into your online account through ANZ’s secure transaction wire, or make a deposit at an ANZ branch. Each deposit must be above $100.
You will then be able to access this account like you would with any other type of online banking service from ANZ. ANZ will take the money that you have deposited and buy index fund units on your behalf. The index fund will change in accordance to changes in the ASX 200 list.
As mentioned above this is a listing of the 200 largest listed companies in Australia. The investment that you send in will be fully linked to the units that you have gotten, so there is a potential that you could earn money if the market goes up.
It’s important to know that you don’t own any shares themselves with this account. This is a unit trust that invests your funds on your behalf.
The withdrawal process is easy. You can only get your money taken out online, but can do it anytime. If you apply for the withdrawal before 12.45pm your units will be redeemed and the money from this will be available the following day. If you apply for the withdrawal after 12.45pm, your units will be redeemed the next business day.
Who should use the ANZ Online Investment account?
There are many kinds of people who could benefit from this service;
- Investors who are not interested or comfortable with a traditional trading method.
- Anyone who wants to get someone to handle trades on their behalf.
- People who are not fully aware of how the market works.
- Parents who want to invest money for their children or teach them the basics of share trading.
Features of the ANZ Online Investment account
The uniqueness of the ANZ Online Investment account is evident in some important features;
- Availability. As it is a web-based platform, you are allowed to access your account whenever and wherever you want: ANZ Internet Banking gives you the opportunity to manage and monitor your investments any time via the ANZ Online Investment account. This means that if you want to make an investment or withdraw some money to your linked ANZ accounts on Saturday night, you can.
- Low fees. ANZ is more competitive than other investment companies as that have to hire investment managers or financial analysts about where to invest your money. This allows a reduction in transaction and management costs: if you make a profit, you will earn more.
- Flexibility. Besides the availability and the low fees, you don’t need a lot of money to open an account: if you have at least $100, you can open the account and then you can make further deposits any time you want.
- Fund diversification. Your investment will be spread across the 200 biggest publicly listed companies on the Australian shares market. If one or some of these companies display a negative performance, your profits might not be affected as more of the companies could have performed well.
The risks involved with the ANZ Online Investment account
There are risks with this account as there are with any investments. The account that you will get will not be interpreted as a form of capital. The Australian government will not guarantee it either.
The performance of your fund could vary according to how the market performs. Therefore, there is a potential that you could lose money on your fund, or that your investment may be losing money when you need to withdraw and that it may make less than you expect it will. There’s also the chance that it may increase in value and make more than you expect - this is the nature of share trading.
Before committing to any investment, it’s always best for you to talk with your financial advisor to see if this is the right option for you to use at a given time.
What other share trading services does ANZ offer?
Share trading is just one of the multiple investment choices at your disposal. If you prefer or feel more comfortable with other financial derivatives, the ANZ Share Investing platform allows you to invest in;
- Shares and equities. You can invest in the Australian shares market.Equity trading corresponds to the buying and selling of company shares and stocks through the Australian Securities Exchange.
- ANZ Share Investing Share Pack. If you are a newbie and you don’t know where to invest, the ANZ Share Investing Share Pack is exactly what you are looking for. This is a pre-selected shares portfolio that allows you to spread the investment risk over different sectors of the market.
- Options. An option is a financial derivative that allows you to predict the performance of its underlying asset (e.g. a stock, an index, a commodity like gold or oil, or a pair of currencies) during a certain period of time or on a specific date. If the price of the underlying asset increases, you will buy a call option, whereas if it drops, you will buy a "put option".
- Warrants. A warrant is a security that gives the holder the right to buy a certain number of securities (usually stocks) at a certain price within a certain time frame.
- Exchange Traded Funds (ETFs). Exchange Traded Funds are a particular form of investment fund traded in the Securities Exchange, that reflect the performance of the related index. If you buy an ETF on the iShares MSCI Australia 200 (IOZ), the most important Australian share index, the ETF will reflect exactly its performance. If you cannot afford the purchase of shares, ETFs can be a good starting point.
- Managed funds. A managed fund is normally set up by investors with similar goals. Each one has a fund manager who invests the money in a diverse portfolio of shares or bonds. ANZ offers more than 500 managed funds corresponding to your investment profile.
- DIY superannuation. A DIY superannuation or self-managed super fund (SMSF) is similar to the managed fund, but you manage it yourself. If you are a professional trader or investor, this is the right investment for you, as you will control the investment decisions. ANZ helps you manage your SMSF by managing the administrative and fiscal obligations, giving you more time to focus on the investments.
- IPOs and structured products. If a company needs to raise capital for its business, it can set up the process of an Initial Public Offering (IPO) that allows it to collect new capital through the issue of new equities, option or convertible notes. Through ANZ you have the opportunity to join these offerings as soon as they are available. You can also invest in structured products. An example of a structured product can be a bond where the normal coupons are not paid in cash, but in the form of call options, warrants or other financial derivatives.
- Margin lending. ANZ can also help you with margin lending and also provide support for setting up your own superannuation portfolio.
- Derivative. This is a financial contract which derives its value from the performance of another asset that is independent.
- iShares MSCI (IOZ). This is an organisation that aims to provide investors with knowledge about the market, before they are charged fees and expenses.
- Put option. Contract between two parties to buy or sell an asset at a specified price.
Fees with the ANZ Online Investment account
There are some costs involved with this type of account. However, these costs can be lower than what you would expect to deal with when trading shares directly. Here are the fees that you would have to pay in order to use this account.
Fees you can avoid
The ANZ Online Investment account doesn’t charge the following fees;
- Account establishment fees
- Brokerage fees
- Entry fees
- Exit fees
Fees you can’t avoid
There are a number of fees this account does charge. These include;
- Management fees of 1% p.a. of your balance
- Transaction costs of 0.25% per deposit or withdrawal
Pros and cons of the ANZ Online Investment account
The pros of the ANZ Online Investment account are;
- A wide range of investments and financial derivatives
- Lower fees than the market average
- Web-based platform, available 24/7
- Diversification of funds
- You can manage your investments directly
The cons are;
- A knowledge of the shares markets and financial derivatives is required and essential to succeed
- You might need an external financial advisor
- ANZ does not provide financial advice, excluding the superannuation portfolio
How to apply for the ANZ Online Investment account
You can apply for the ANZ Online Investment account online, but ANZ restricts applications and opens them when they see fit. Remember, to open an account you’ll need a minimum of $1,000. Also, you will need to get an account with ANZ if you want to use this service. This is so you can deposit money into your account and withdraw money from it when needed.