Aussies encouraged to put more into savings accounts

Australians have been encouraged to put more into their savings accounts by one senior economist.

Westpac managing director Gail Kelly told business leaders at a meeting in Adelaide that consumers should be sure to take more care of their accounts – potentially including high interest savings – instead of reverting back to taking out loans.

She said the age of cheap loans came to an end when the recession hit, but noted the possibility of people borrowing more once the economy recovers.

"It’s one of the things that keeps me awake at night," Ms Kelly said.

"I keep thinking that as the Australian economy improves – and therefore our demand for credit increases – if our savings don’t improve as well, then we will be vulnerable."

She went on to say funding issues relating to the fact that Australian consumers and businesses have, in the past, been borrowing double what they were saving, may lead to the need for banks to up their savings account interest rates.

In order to meet people’s need for loans, the public must be encouraged to put more into their bank accounts so that the system can be sustainable.

This comes as ANZ announced it is to eliminate fees on some of its savings accounts as part of a rebranding programme.

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