Savvy stockpiling: Aussies searching for higher returns
Australians are hoping to accelerate their savings by getting the best rates, according to new research by Finder.
A Finder survey of 1,096 respondents revealed almost 1 in 3 (29%) – equivalent to 5.8 million people – have opened a new savings account in the past 12 months to take advantage of higher rates.
The research showed 12% of Aussies opened a savings account for the very time, while 16% have never opened a savings account before.
Alison Banney, money expert at Finder, said savings rates are currently the highest they've been for years.
"There's a huge opportunity for Australians to maximise their savings.
"Savings accounts have dramatically changed since many may have opened up their first – a difference of thousands could be made in interest."
Finder's Consumer Sentiment Tracker reveals the average Australian has $33,874 in savings and puts $733 into their nest egg each month.
A $33,874 lump sum deposited in a high interest savings with an interest rate of 5.65% p.a. – the highest ongoing offer in our database* – would earn $1,964 in interest over 12 months, Finder analysis shows.
That same lump sum would only earn $546 at 1.6% average savings rate.
Banney said missing out on your bonus savings rate could cost you thousands.
"Most providers have conditions you need to meet in order to earn the bonus interest rate each month, such as the number of transactions or a certain amount deposited into the account.
"Our research shows you could miss out on $1,777 for not meeting the bonus criteria over 12 months."
| Type of rate | Total interest rate p.a. | Interest earned over 12 months | Difference |
|---|---|---|---|
| Leading ongoing bonus savings rate* | 6% | $1,964 | ---- |
| Average savings rate | 2% | $546 | $1,418 |
| Standard variable rate (if you miss your bonus criteria) | 1% | $187 | $1,777 |
| Source: Finder analysis of interest earned on an initial deposit of $33,874 with no monthly contributions over 12 months. *ME HomeME Savings Account, if criteria met |
Banney said a healthy savings account balance can help households weather setbacks like emergency expenses or job loss.
"Having a savings buffer is one of the best ways to avoid bill stress which is affecting a growing number of people during the cost of living crisis.
"Make sure you are getting the best deal on your cash savings by regularly checking if your interest rate has kept pace with the market leaders," Banney said.
Gen Z is the most likely to have opened a new savings account in the last year, with nearly half (46%) seeking out more interest, compared to 9% of baby boomers and 22% of gen X.
Nearly 1 in 3 (29%) in gen Z said this wasn't their first account.
| Have you opened a new savings account in the last 12 months to take advantage of higher interest rates? | |
|---|---|
| Yes, this isn't my first account | 17% |
| Yes, this is my first savings account | 12% |
| No, I have never opened a savings account | 16% |
| No, but I have a savings account | 55% |
| Source: Finder survey of 1,096 Australian mortgage holders, June 2023 |
Here are the best ongoing saving account rates.