Children 'upgraded' to 0% savings accounts

Mozo

Thursday 28 October 2010

Children with BankSA savings accounts are being "upgraded" to new accounts that offer zero interest, it has been revealed.

Children upgraded to 0 savings accounts content

According to the Advertiser (Adelaide), BankSA is phasing out its School Saver Account, which pays 0.25 per cent interest to existing primary school-aged customers.

Under the new scheme, children turning 13 are sent a letter telling them it is "time to upgrade you to your new bank account".

The new account is a Complete Freedom Student Account, which allows for free transactions but pays 0.00 per cent interest.

Speaking to the newspaper, Canstar Cannex financial analyst Adam Beu argued that the 0.25 per cent paid to young BankSA customers was "not really any interest at all".

"If you've got $100 in those accounts, you're getting 25 cents' return," he said. "That sort of interest doesn't really work for anyone."

Indeed, Mr Beu urged young Aussies to compare savings accounts in search of better returns.

"The cash rate is 4.5 per cent so if you can't get the cash rate, maybe you should be looking somewhere else," he added.

His comments come after research by Canstar Cannex found massive variations in children's accounts, with interest rates ranging from 0.01 per cent to ten per cent.

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