Now is a good time to save, says RBA

Now is a great time to get high returns on savings deposits, a senior Reserve Bank of Australia (RBA) official has claimed.

RBA assistant governor Malcolm Edey said that competition among the banks for customer deposits has become increasingly intense in recent years, partly because of the financial crisis.

He noted that this had driven up interest rates on many savings products, suggesting Aussies now have a wealth of attractive options when they come to compare savings accounts and term deposits.

"Obviously this is good news for depositors. It means that if you have funds to invest and you’re prepared to shop around now is a very good time to find a favourable rate," he said.

Mr Edey also observed that some banks have been offering "specials" on their term deposits of around 6 per cent, or about 100 basis points above the bill rate.

Last week, the federal Budget announcement confirmed that Australian term deposit holders will benefit from a new 50 per cent tax cut on the first $1,000 of interest earned on savings.

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