Expert: Transfer surplus funds to online savings accounts

Australians should transfer any surplus funds into high interest online savings accounts in order to get the best returns for their money, an expert has said.

Writing for Coolum News, Paul Clitheroe, founding director of financial planning firm ipac, observed that many banks are currently paying rates on savings accounts that are well above the Reserve Bank’s official cash rate of 4.25 per cent.

He claimed that there is "a smorgasbord of options" for Australians who wish to compare savings accounts, noting that Citibank’s Online Savings account offers a rate of 6.01 per cent while the likes of St George Bank’s DirectSaver or the AMP eASYSAVER pay around 6.0 per cent or slightly less.

"If interest rates continue to climb, we have even more incentive to tuck our surplus cash into one of these high interest accounts," said Mr Clitheroe.

It was recently reported in the Daily Telegraph that the federal government is planning to bring in tax breaks for Australian bank accounts and deposits as part of a new savings scheme.

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