August savings rates: Cuts continue into the second half of 2021

While savings interest rates began to plateau over the last few months, the new financial year has brought further reductions.

The average ongoing savings rate dropped another two basis points to 0.41%, with Mozo’s research team recording 11 cuts in the database last month.

It’s not great news for savers, especially those impacted by current COVID-19 lockdowns and restrictions. If you are facing financial hardship, you may want to explore current support programs, including assistance from banks and COVID government subsidies for individuals and businesses.

We’ve also got a few tips for cutting down on splurging for Australians currently in lockdown.

How to curb spending during lockdown

• Treat yo’self – but have goals: We’ve all probably felt the dopamine kick of therapy shopping, but ordering a package or eating a royal feast every other day isn’t going to be healthy for your bank balance. Set goals for yourself – not limits – so you purchase items or experiences that you really value, rather than everything on the sale rack.
• Look to nature: You need vitamin D after all those indoor hours, and getting out amongst the greenery is free. So, factor in a regular socially distanced walk, bike ride or swim somewhere with plenty of leaves and wide open spaces.
• Test passive savings features: If you’re yet to jump on the minimal-effort savings train, now is the time to try it out. Experiment with round-up features which transfer money from your bank account to your savings every time you make a purchase by rounding up the difference to the nearest whole dollar and whizzing away to change to earn interest. Or, set an automated transfer for post-pay-day so you lock away funds to grow interest asap.
• Set savings goals: You might be feeling a little aimless during lockdown, but this too will end (even if life continues to look a little different). While you may not be able to plan a holiday or major event any time soon, consider separating your savings into sub-accounts for these goals anyway. This way, you can get excited about saving as you're striving for something tangible, even if it is further down the track than you had imagined.
  

If you want to make the most out of the cash you’ve got, make sure you’re getting a good deal on your savings interest rate by comparing the options below.