Putting your money in a high interest savings account lets you build your savings and take advantage of compound interest at a competitive rate.
As of May 2024 the average interest rate across all savings accounts in Finder's database is 2.75%. But the best savings account rates are now around 5.50%.
Comparing and switching savings accounts is more important than ever, as the difference between banks can vary widely.
The cash rate hit a record-low of 0.10% during the pandemic, and savings rates plummeted as a result, making it harder for Australians to earn interest on the money in their bank accounts.
Interest rates on the typical online savings account follow the cash rate very closely, whereas bonus rates are a little higher.
In comparison, the average variable interest rate on a home loan sits substantially higher than the cash rate, and savings rates, at any one time. Meanwhile, other lending products don't track the cash rate at all – credit card rates sit around 20% while personal loan rates sit around 10%.
The average full-time worker earns $98,218 per year, or $8,185 per month, according to the ABS.
Men in full-time work ($103,106) earn higher salaries than women on average ($90,730). WA tops the list as Australia's highest-paying state, with the average full-time worker making $109,600 per year. Meanwhile, Tasmanians earn the least, an average of $86,840 per year.
A Finder survey found that the average Aussie would need to earn a staggering $336,516 per year – or just under four standard salaries – before considering themselves rich.
Gen Z needs the most money to feel rich by a long shot ($428,474), compared to $345,785 for millennials. Gen X needs the least of the generations to feel wealthy ($294,705), compared to $306,505 for baby boomers. Men ($347,395) would need to earn roughly $20K more than women ($326,929) to consider themselves affluent.
The total reported value of all savings accounts in Australia is an estimated $655 billion, with the average person having $37,915 stashed away in 2024.
Understandably, households earning more than $100,000 per year ($67,932) have more than twice as much money saved as households earning less than $50,000 ($30,848). And as the generation that is at the peak of their careers, gen X have the most in savings ($57,794), while gen Z have the least ($28,372).
Men have considerably more money saved up than women. While the average man has $47,398 stockpiled, the average woman has just $27,492 in savings.
The discrepancy between male and female savings is greatest among gen Z Aussies, with men having 154% more in savings than women. This is followed by gen Y, where the difference is 55%, and gen X, where the difference is 45%.
The average Aussie puts away $729 per month in savings, with men ($850) saving 39% more per month than women ($612). Millennials are saving the most each month ($839), followed by gen Z ($822) and gen X ($719). Baby boomers, who are mostly beyond retirement age, are understandably saving the least ($496).
Those living in NSW are making the greatest monthly contributions to their savings accounts ($861), while those in South Australia are making the least ($502).
The 50/30/20 rule is a great way to determine how much of your income you should be saving. The general recommendation is to dedicate 50% of your earnings towards essential expenses like rent and groceries, 30% towards discretionary spending on things like holidays, eating out and other splurges, and the remaining 20% should go into your savings.
A worrying 47% of Australians could only survive off their savings for 1 month or less, with just 22% saying they could last six months or more.
Women (54%) are more likely than men (40%) to have one month's worth of savings or less. One in five women (19%) are living paycheck to paycheck with less than a week's savings, which is almost double the percentage of men doing so (10%).
More than half of gen Z (57%) could live off their savings for a month or less, followed by 50% of millennials. Meanwhile, 39% of baby boomers would be able to get by for at least a year
Around half of Australians (46%) use Internet banking to track their spending, followed by 34% who use banking apps. As dated as it might be, 28% of Aussies continue to use spreadsheets to manage their money, and just 9% use budgeting apps. A concerning 17% don't track their spending at all.
Budgeting apps like the Finder app are a great way to see all your income and spending in a single place, and figure out where you might be able to cut back.
Men (19%) are more likely than women (16%) to say they don't keep track of their spending, but with accounting software, men (14%) are more likely to use this than women (3%).
Millennials are the most proactive group when managing their finances, with just 12% saying they don't monitor their expenses, compared with more than a quarter of baby boomers (26%).
As the tech-savvy generation, generation Z are the most likely to manage their money through banking apps (49%) or budgeting apps (13%), compared to baby boomers (13% and 3% respectively).
The majority (59%) of Aussies have a savings or transaction account with just 1 bank, while close to a third (30%) use 2 banks and 10% use 3 or more banks. Millennials (48%) are the most likely to have an account with more than 1 bank, compared to the more loyal baby boomers (31%).
The top reason Aussies choose to have an account with multiple banks is for convenience (43%), and 39% say they prefer to have 1 account for transactions and 1 for accruing interest.
Men (26%) are more likely than women (16%) to want to have a separate account from their partner.
Baby boomers (58%) are the most likely to be driven by convenience, while generation Z are most interested in having separate accounts for savings and transactions (53%).
Close to 1 in 5 people (18%) are banking with a neobank, and a further 26% say they would consider a neobank if they were offered a higher savings rate.
A neobank is different from a traditional bank because it has no physical branches. In theory, this makes them more cost-efficient and allows them to offer more competitive rates.
They also boast a greater emphasis on technology, relying predominantly on mobile apps that provide detailed insights into your spending and saving patterns.
More than two-thirds (69%) of those who would consider or are already with a neobank agree that one of the reasons for doing so is because of the convenience of online banking. Wanting to transfer money more easily (39%) and the prospect of free overseas transactions (35%) come in second and third place.
Generation Z are the most likely to choose a neobank in order to make money transfers easier (48%) and because they like the look of a new card (25%), compared to baby boomers (22% and 4% respectively).
Millennials (45%) are the most interested in receiving free overseas transactions, compared to 15% of baby boomers.
Take advantage of interest. The easiest way to build up your savings is to put your money into a high interest savings account. This will maximise the returns you make from simply leaving your money in the bank. And if you don't think you're getting a good deal, it might be time to switch.
Set yourself a savings goal. Are you hoping to buy a new car this year or get your foot into the property market? Or maybe you've got a wedding or a big holiday coming up? Let your life goals motivate you to put aside a certain amount of money each month into a dedicated fund. Follow the 50/30/20 rules and try to save at least 20% of your income each month.
Budget regularly. There are a number of budgeting tools such as the Finder app, which break down your spending into categories and show you where you could be saving money or getting a better deal on a product. Monitor your spending regularly to keep yourself accountable and on track towards your goals.
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