Monday moneyvator: Switch to a better savings account deal

Monday moneyvator: Switch to a better savings account deal

With the RBA leaving the cash rate at a record low 2% since May and our database showing the average ongoing savings account rate is just slightly higher at 2.35%, you might be thinking it’s impossible to get a decent return on your coin.

However there is some good news, as our research shows Aussie savers are in a better position than they were two years ago. This is largely due to a lower inflation rate, which has dropped from 2.4% to 1.3% from June 2013 to June 2015.

Just take a look at the below table to see how all Aussie generations are faring better:

2013 vs 2015: Gen Y Gen X Baby Boomers/Retirees
Median savings $18,910 $7,706 $49,427
Effective Earnings in 2013 -$47 -$19 -$122
Effective Earnings in 2015 $54 $22 $141
Difference $101 $41 $263

Interest earned is based on the average ongoing savings rate of 2.35%. The relevant tax rate and impact of inflation (current inflation rate is 1.3%) is then deducted to give an “effective earning” amount. Info current as at 26 June 2015.

Of course, even with a lower inflation rate you’ll still need to ensure you’ve got your cash stashed in a savings account with a high interest rate attached to see your savings really soar.

Let’s take the average savings account rate mentioned above of 2.35% and compare it against one of the best rates of 3.50% offered by ING DIRECT with its Savings Maximiser account. As long as you met the conditions, with a $10,000 balance and made a regular deposit of $500 a month, our savings calculator shows you would receive $150 more interest over a year than if you had stuck with the average rate savings account.

Here are some of the top savings account deals around at the moment to help you grow your green:

  1. RAMS Saver – 3.60% ongoing interest rate when you make no withdrawals and deposit $200 each month.
  2. ING DIRECT Savings Maximiser – 3.50% ongoing interest rate, as long as you open an Orange Everyday bank account and deposit at least $1,000 a month.
  3. Bankwest Hero Saver – 3.25% ongoing interest rate if you make a deposit of at least $200 and don’t make any withdrawals in a month.
  4. ME Online Savings Account – 3.20% for the first 4 months when you have a linked ME Bank Everyday Transaction Account.
  5. St.George Maxi Saver – 3.20% for the first 3 months if you’re opening the Maxi Saver account for the first time.
Monday moneyvator: Switch to a better savings account deal was last modified: July 20, 2015 by Mozo

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