Renato1
Established Member
- Joined
- May 1, 2015
- Posts
- 1,730
So, the subject account pays 12 Qantas FF points per month per $100 held in the account.
This means it pays 144 Qantas FF points per year per $100.
I value Qantas FF points at one cent per point for domestic travel, others value the points higher.
So in my case, I'd get an effective $1.44 per $100 per annum, or an effective interest rate of 1.44%.
Currently, the cheque account that my fortnightly money gets paid into earns next to nothing in interest, but my On-line Saver account earns 1.8%. However, on the 32.5% tax bracket plus 2% Medicare Levy, the after tax interest rate reduces to 1.179%. while at the 47% tax bracket plus 2% Medicare Levy the after tax interest rate reduces to 0.918%.
Plainly, if one is on the highest or second highest tax bracket and getting the low interest rates I get on my ready cash money, then getting "interest" as untaxable Qantas FF points instead of taxable cash, results in a tax saving - especially if one values the FF points more highly than I do.
So I've just opened a Bankwest account.
Cheers,
Renato
This means it pays 144 Qantas FF points per year per $100.
I value Qantas FF points at one cent per point for domestic travel, others value the points higher.
So in my case, I'd get an effective $1.44 per $100 per annum, or an effective interest rate of 1.44%.
Currently, the cheque account that my fortnightly money gets paid into earns next to nothing in interest, but my On-line Saver account earns 1.8%. However, on the 32.5% tax bracket plus 2% Medicare Levy, the after tax interest rate reduces to 1.179%. while at the 47% tax bracket plus 2% Medicare Levy the after tax interest rate reduces to 0.918%.
Plainly, if one is on the highest or second highest tax bracket and getting the low interest rates I get on my ready cash money, then getting "interest" as untaxable Qantas FF points instead of taxable cash, results in a tax saving - especially if one values the FF points more highly than I do.
So I've just opened a Bankwest account.
Cheers,
Renato