Investors prefer to compare savings accounts

A growing number of Australian investors are turning their back on the share market in favour of bank deposits, it has been suggested.

Jason Bryce of the Herald Sun claimed that investors are currently “flocking” to savings accounts and term deposits, with bank deposits now holding almost as much money as the value of the entire Australian stock market.

He referred to research by Canstar Cannex which found that over the past three years, the average return from big bank one-year term deposits has been 5.6 per cent.

In addition, Mr Bryce pointed to the fact that the big four banks currently hold almost one trillion dollars in deposits – up almost 12 per cent on a year ago while the number of Australians who own shares directly is 3.85 million compared with almost four million two years ago.

Christopher Joye, managing director of property research firm Rismark, commented: “Investors are waking up to share investing. When you factor in the risk of loss in shares, you get a risk-adjusted return that is actually not that attractive.”

However, Geoff Saffer of the Australian Stock Report insisted that shares are still worth the risk given that their performance moves in cycles.

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