No interest in saving: 29% of Australians moved money elsewhere
In the wake of record low interest rates, Australians are moving money out of savings accounts and into other investments, according to new research by Finder.
A nationally representative survey of 1,015 respondents revealed close to a third of Australians (29%) have moved a portion of their savings out of their account due to low interest rates.
The research found 1 in 10 (11%) people – equivalent to 2.1 million Aussies – moved some of their savings to an investment account.
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Kylie Purcell, investing expert at Finder, said Australians are looking for ways to maximise their returns outside of savings accounts.
"The low cash rate has made it pretty tough for Australians to earn interest on the money sitting in their bank accounts.
"Instead, moving a portion of savings into shares gives people the opportunity to earn a higher return.
"Certain shares and funds also pay out dividends, which can give you an extra boost of cash," Purcell said.
The research shows the average Australian today has $23,394 invested in shares – equivalent to 50% of the amount they have in savings.
On average men have more money invested in shares than women ($36,004 to $9,884 respectively) and they also have a higher ratio of shares to savings than women (74% compared to 29%).
According to the survey, 7% of Australians have shifted money from savings into micro-investing apps such as Raiz, while a further 7% have used some of their savings to top up their super.
A further 5% have moved some of their savings into cryptocurrency.
Purcell encourages Aussies who want to start investing to do their research first.
"Investing is a smart way to increase your net wealth, but it's essential to do your due diligence first.
"Putting all your eggs in one basket is never a smart move – diversifying your investments between different funds and different asset classes helps to reduce risk.
"Always do your research before diving in. If you're new to the space and not sure where to begin, ETFs are a great place to start," Purcell said.
Finder's data also reveals the average Australian has $904 in cryptocurrency and $259 in micro-investing apps – equivalent to 3% and 1% of what they have in savings.
Superannuation is Aussies' biggest investment, with the average person having $118,888 in super, or 236% of what they have in savings.
| Given the low interest rate environment, have you moved some of your savings from a traditional savings account to any of the following? | |
|---|---|
| I haven't moved any money from my savings account | 56% |
| I don't have any savings | 15% |
| Cash savings | 12% |
| Investment account | 11% |
| Micro-investing account | 7% |
| Superannuation | 7% |
| Cryptocurrency | 5% |
| Other | 3% |
| Source: Finder survey of 1,015 respondents in July 2021 |
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