According to the Australian Banking Association, there are over 18 million bank customers. This basically reveals that more people have acknowledged the role of banking in their financial life.
But recent data has shown that many Aussies are not getting good returns on their hard-earned money through savings accounts. Most banks are offering a saving rate of about 1 to 2 percent with some going below 1 percent. As Roland Bleyer, the founder of Mate.com.au says: “Regardless of national interest rates, there is always a bank account that can give you a better deal on savings – but people found it too complicated to take the time to find it. We changed that by doing all the hard work so that Australians can find the best option much quicker”.
So, if you’re planning to open a savings account, learning more about them can be beneficial in picking the rights one. In this post, we’re cover some interesting facts on savings accounts in Australia. Keep on reading!
What Is the Best Savings Account in Australia?
Basically, there’s no one single account that’s deemed best. Banks offer different features and perks for account holders. So, it’s a matter of comparing several options to find one that meets your unique needs. This is why companies like Mate.com.au helps Australians to find the best savings account tailored to individual needs and habits.
You want to look at the interest rate, which should basically range from 2 percent to 3 percent. However, getting a higher rate is likely to revert back a standard deposit interest rate after the honeymoon period. In this case, you should look at the length of the period.
How and when the interest payments are made is also a crucial consideration for looking for the best savings account in Australia. Some banks also have a minimum monthly deposit requirement. What you feel about the amount size determines if the account is best for you.
The minimum and maximum account balances are also key points to keep in mind. What interest you lose when you withdraw money and the rewards you get for regular deposits should also help you determine if the account is great.
Also, you should consider if the account has a compound interest, which will help you increase your savings potential.
So, here are interest facts about savings accounts:
1. Savings Accounts Help You Save
If you’ve been holding back on saving money, you should seriously reconsider that. Savings accounts, provided you pick the right one, have the ability to grow your savings faster. Their interest rate is high than the basic transaction accounts.
Some accounts make it hard for you to access your money. This means you’re unlikely to make regular withdrawals, compelling you to keep your savings intact for long. Also, your personal commitment to saving regularly and meeting set conditions can also make you earn more in interests and rewards.
2. Online Savings Accounts Offer the Best Rates
Today, you don’t need to physically go to the back to take care of your financial stuff. Thanks to technology, you can easily open a savings account online and manage your money right at home. Some traditional banks are offering online banking as an option while there are banks run their entire operations online.
Online savings accounts offer the best rates because they don’t have the same overhead costs as brick-and-mortar banks. In this case, you, the account holder, enjoys the savings, too. It’s possible to get an interest rate of 2.5 percent or more. Additionally, their fees are pretty low, allowing you to save more.
3. High-Interest Rate Savings Accounts Are Still Available
Recent data has indicated that the interest rate offered by banks is almost hitting the zero mark in Australia. However, banks still offer high-interest rate savings accounts. Unfortunately, most banks with the highest rates have honeymoon periods.
For example, HSBC Serious Saver offers an interest rate of 2.60 percent, which has a 4-month intro period. Some banks have rates range from 2.30 percent to 2.50 percent, but they might require you to make other financial commitments via them, for example, buying a health plan.
4. They Have Pretty Easy Signups
Like most accounts nowadays, savings accounts in Australia are easy to set up.
With only accounts, allow you need is to click the Apply button to get started. Filling the application can take as little as five minutes. Just be sure to take the time to understand the details of the account you want to set up.
Most accounts will have a minimum deposit you’ll need to make upon completing the setup. If the account has a monthly deposit requirement, setting up automatic transfers is pretty a good idea. After this step, all you need is to keep track of your account and adhere to the terms.
5. You Can Switch Accounts
If you want to keep earning a higher interest rate, you can keep switching your account after the introductory period. This means you’ll have to switch banks, too. You only get one introductory interest on your first account with a bank.
Then again, this might be a hustle since savings accounts have different requirements. You’ll need to meet new requirements every time you make a switch. If this is a hustle, you can try out term deposits. In this case, you won’t have access to your money for the duration of the term, unless to are willing to pay a hefty penalty.
Savings accounts in Australia are a great option for tracking your savings goals. It’s just a matter of finding one that makes attaining your goals an easy experience. Interest rates are gradually falling, but you can still get better rates depending on how willing you’re to commit to different terms.
Also, learn to save more by creating a budget and reducing your personal expenses. For example, avoid impulse buying by creating a shopping list. Or, stop subscriptions that you actually don’t use. This way, you’ll have more money to put in your savings account.