Summer is a time for fun. For school holidays, overseas adventures and, of course, Christmas!
But before you start packing for your end of year vacation or ticking off presents on this years’ Christmas list, could now be the right time to make sure your savings account stash is earning the best rate it can?
Unfortunately for Aussie savers, there’s been little to cheer about when it comes to savings account rates in the past few years. With the Reserve Bank’s official cash rate having stayed steady at an historic low of 1.50% since August 2016, savings account interest rates have likewise remained on the lower side.
In fact, rates have fallen.
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New data shows that the average ongoing savings account rate in the Mozo database has fallen from 1.57% to 1.52% over the past year, while it has dropped even further since September 2016 when the average rate was 2.05%.
“Given the recent downward trend in savings account rates, Aussie savers could be forgiven for eyeing off their mattresses as attractive places to stash their savings,” said Mozo Director, Kirsty Lamont.
“But the good news is that there are still a number of competitive offers out there for savers wanting to start summer on right track, especially for anyone happy to meet any minimum account requirements that can unlock more attractive ongoing bonus rates.”
Why shaking it up could be worth your time
So if your current savings account rate is more likely to prompt tears than a smile, there could be alternative options out there.
In fact, there are currently 25 savings accounts in the Mozo database offer ongoing rates above 2.50%, or 98 basis points above the average. However, these are accounts with ongoing bonus rates, meaning savers will need to meet one or more minimum requirements each month in order to grab that top rate.
Typical minimum requirements for bonus rates can include:
• Not making any withdrawals throughout the month.
• Making a minimum deposit into the account or a linked transaction account, ranging anywhere from $1 to over $1,000 each month.
• Using a linked debit card to make a minimum number of purchases each month.
So what kind of a boost could switching to a savings account with a more attractive rate really give?
Take this example. Mark is a steady saver, having already saved up a balance of $10,000 by putting away $400 into his savings account each month, which has an interest rate of 1.52% (currently the average in the Mozo database). According to the Mozo savings calculator, if Mark continued to make the same regular contributions he would end up with a balance of $32,142 after four years.
However, if Mark was able to meet the requirements needed for an account with a bonus interest rate of 2.50% and continue to make the same regular contributions, he would end up with a balance of $32,995 after fours years - $853 more.
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Time to sit down to review your own account before summer rolls around? Check out some of the great savings account offers below, or head over to Mozo’s dedicated savings account comparison hub for even more high interest deals.