Savings accounts that earn Qantas Points: How much could you get?
Would you be better off with a high-interest option instead? I've crunched the numbers.
Right now, just 2 savings accounts in Australia let you earn Qantas Points on the balance in your account: the Bankwest Qantas Transaction Account and the Qudos Qantas Points Saver. Is earning points that way a good strategy, or would you get more value with a higher-interest option elsewhere?
The accounts themselves are very different: the Bankwest is an everyday transaction account, while the Qudos is designed for longer-term saving. Let's look at how many Qantas Points you could earn from each of them.
How many Qantas Points can I earn from an everyday account?
Starting simply, let's assume you left $50,000 -- the maximum you can earn points on -- in the Bankwest Qantas Transaction Account for a whole year. Over that period, you'd earn 54,750 Qantas Points (you get 0.3 Qantas Points per day per $100 in the account).
At our standard valuation of 2 cents per Qantas Point, that's worth around $1,095. Subtract the $72 in account fees you'd have to pay, add the tiny $5 in interest you'd earn, and you've effectively got $1,028 in value.
For a points enthusiast, that's an OK outcome, but it's not necessarily the top value you could get from your $50,000.
That's twice the value of the Qantas Points. And that's without taking any bonus interest offers, such as the current 5.4% for the first 4 months, into account. Other high-interest savings accounts would also beat this total value.
I realise that as a transaction account, most folks would not just leave large sums of money in there. They also might want to take advantage of the 3 Qantas Points you earn each time you make a Debit Mastercard payment from the account.
What happens then? Let's assume this typical set-up:
- You pay $5,000 into the account at the start of month (say as your salary), but that gets spent down so none is left after 28 days. (I've generously assumed even spending across the month - in reality, you'd likely get paid and then immediately deal with key monthly bills.)
- You make 7 qualifying Debit Mastercard transactions each week. (Call it a coffee each weekday, a grocery shop and some petrol.)
Under these circumstances, I calculate you'd earn around 3,400 Qantas Points in a year. That's a handy bonus, but not an earth-shattering number -- it's worth around $68 at our standard valuation.
How many Qantas Points can I earn from an high-interest savings account?
The Qudos Qantas Points Saver is a very different beast. Let's assume the same behaviour as our first scenario: $50,000 left in the account for a year. (Again we'll ignore bonus offers.)
In this case, you'd earn around 20,000 Qantas Points (you get 400 points per year for every $1000 of your balance, credited monthly). That's worth an effective $400. Again, we're taking 2 cents per Qantas Point as the base value.
You'd also earn around $2,063 in interest over the year, assuming the current interest rate of 4.05% holds. That's not a given, as the rate does vary over time. At the previous lower rate of 3.7%, you'd earn $1,881 in a year.
Even assuming that lower value, you'll have earned around $2,200 in value (Qantas Points plus interest combined). That's a much better return from putting $50,000 away for a year than you'd get with the Bankwest account under the same circumstances.
That total value is also remarkably close to what you'd get with the Macquarie account example we discussed above. The difference is that the value is split between Qantas Points and interest, rather than being interest alone. Again, there are potentially higher-interest accounts to be found if you're looking for more cash rather than more points.
The Qudos account lets you earn Qantas Points on balances up to $1 million, which is a lot higher than the Bankwest limit. In the admittedly unlikely event that you left $1 million in the Qudos account for a year, you would earn around 400,000 Qantas Points and $41,260 in interest. That's quite appealing, but I would still want to pay off my mortgage first!
The bottom line? Everyone's needs differ. Both these accounts offer an effective but not earth-shattering way of topping up your Qantas Points. If your goals are broader than just accumulating Qantas Points, you may want to look at other options for getting the most for your savings.
In matched scenarios, the Qudos delivers more total value (interest plus points) by my calculations. The Bankwest will help you earn a handful of extra points for daily transactions, but won't be as useful for that as a credit card that earns Qantas Points on every dollar spent.
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