Big bank energy: Rising cost of living pushes consumers toward big four
Trust in traditional banks is growing with more Aussies saying they bank with the big four, according to new research by Finder.
Finder's Consumer Sentiment Tracker shows a staggering 4 in 5 Australians (80%) – 16.2 million people – bank with one of the big four banks – the highest number on record since Finder began tracking this question in 2019.
That proportion has been trending upwards since January 2022 when just 71% of people said they banked with the big four – an additional 1.8 million customers Australia's largest banks have attracted in less than 2 years.
Graham Cooke, head of consumer research at Finder, said more individuals are gravitating to the big banks as the cost of living rises.
"Consumers are prioritising their financial security as they grapple with interest rate rises and rising living costs.
"In uncertain times, the big banks can feel like the safest option for consumers to stash their savings."
Cooke said consumers are being more conservative with the way they manage their money.
"The big banks may provide peace of mind for those looking for stability, but it's worth remembering that all deposits up to $250k in Australian institutions are protected by the Government Guarantee.
"While the big lenders may instil a great deal of trust due to their long standing history, some of the smaller banks are offering better deals."
Aussies are missing out on great savings
Separate Finder research found 2 in 3 Australians (65%) – equivalent to 11 million people – are completely oblivious of the interest rate they are earning on their primary savings account.
The research found that for those who do know what rate they are getting, the average they are earning is 3.9% p.a.
The best saving accounts offer almost 1.5 times that amount (5.65% – according to the highest ongoing rate in Finder's database).
For a $30,000 balance, the difference between those two rates – 3.9% and 5.65% – is $549 a year in interest if you never added another dollar.
Cooke urged Aussies to do an audit of their savings products.
"The big banks have lifted many of their ongoing products but mid-level and smaller lenders continue to offer the highest ongoing rates on the market.
"Look for a leading, ongoing rate and make sure you will meet the conditions to earn your bonus interest.
"With lenders paying as much as 5.65% p.a. currently – you can bolster your savings faster if you are diligent," Cooke said.
The survey found savvy gen Y earn the best savings interest rate of 4.2% on average, compared to baby boomers (3.7%).
| What rate are you getting on your primary savings account? | |
|---|---|
| Baby boomers | 3.70% |
| Gen X | 4% |
| Gen Y (millennials) | 4% |
| Gen Z | 4% |
| Source: Finder survey of 327 Australians who know their savings rate, July 2023 |