How to triple the interest on your savings today
Monday 15 July 2019
For Aussies stashing away hard-earned cash, whether for a holiday overseas or a first home, it can be frustrating to watch your savings pile grow at a much slower pace than you’d hoped. But Mozo data shows there’s an easy way to close the gap between you and your goal: by trading in your old savings account for a better deal, you could be tripling the amount of interest you earn per year.
According to Mozo’s database, the average ongoing base interest rate in July 2019 is 0.61% while the highest ongoing base rate is 2.00%. Switching from the average to the highest base rate would bump up your annual interest by about 228%.
This means that if you moved $10,000 to a savings account with the highest base rate and made monthly deposits of $500 over 5 years, you would be earning $1,810, or over 3 times, more interest than you otherwise would with the average base rate.
“With savings account interest rates at a real low point, it’s vital to be shopping around and to be prepared to leave a bad deal for a better one,” said Mozo Director, Kirsty Lamont.
“There’s no point staying loyal to banks that offer poor rates on their savings accounts. You could be pocketing a whole lot more money just by making a simple switch.”
How to snatch up good interest rates
If you’re afraid that the search for a better-value savings account might cause too much hassle, don’t worry - the process is simple! Here are two ways to get you started:
1. Negotiate with your bank
You’re probably comfortable with walking into a store and asking the retailer for their best price, so why not do the same for your bank? Calling up your bank and negotiating a higher rate for your savings account could land you a better deal and earn you more interest as you save up for your holiday, your first home or any other long-term goal.
RELATED LINK: How to haggle - tips for negotiating a better deal
But be sure to do your research first so you’re well-informed about the current market. Check out all your options and see how your bank stacks up against them by using our savings account comparison table.
2. Switch to another savings account
If you can’t reach a negotiated rate you’re happy with, be ready to walk away and move your cash stash to a savings account with a higher interest rate. After you’ve compared your current bank with others in the market and found an account that suits you, all you’ll have to do is:
- Open the new account
- If you have direct debits coming out of your account, or direct transfers going into it, transfer these over
- Transfer your remaining funds
- Close your old account
Sounds simple enough, right? Check out our high interest savings accounts comparison table to find the best deals for you, and make the switch today.