Savings accounts 'increasingly popular with businesses'

Thursday 14 July 2011

Article by Mozo

Consumers may want to follow the lead of businesses in Australia by focusing on filling their savings accounts.

Aussie firms focusing on saving

Figures from East & Partners reveal that firms are depositing $1.25 for every $1 they borrow, up ten cents compared with last year.

Paul Dowling, principal analyst at the firm, told Bloomberg that this is helping financial institutions to fund mortgage lending, news that might be welcomed by prospective home loans customers.

"Active reallocation of deposit funding from business customers to mortgage lending is taking place," he stated.

However, research director at RP Data Tim Lawless recently observed that many potential property buyers are opting to postpone taking out a home loan.

He suggested that many are looking to put cash into their savings accounts rather than get into further debt by purchasing a house.

"The average Australian is content to pay-down debt and wait for some economic certainty to return," Mr Lawless claimed.

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