RaboDirect urges Aussies to compare savings accounts

Australians should transfer their spare funds from everyday transaction accounts into high interest savings accounts, the online bank RaboDirect has said.

The advice came as RaboDirect announced the result of its "money tree" experiment in which it adorned a tree in Sydney’s Fleet Park with $5 notes.

RaboDirect said: "The experiment was conducted to identify how Australians react to money they can see and touch, compared to the way they treat their actual savings, which often sit untouched in transaction accounts and low interest paying savings accounts that incredibly still have fees and charges."

The bank said that after a slow start where bystanders ignored the cash or simply took pictures of it, the tree was stripped bare in less than three hours.

According to RaboDirect, the experiment shows that Aussies should be looking to compare savings accounts and make more of their money.

It said this will be proved by its soon-to-be-released National Savings Survey, which reveals Australians are missing out on $4.7 billion in lost interest each year by failing to transfer surplus funds into online savings accounts.

The news comes after Reserve Bank assistant governor Malcolm Edey suggested that the current interest rate climate has made now a great time to save.

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