Term deposits dumped in favour of high interest alternatives
Over the past 12 months the number of Australians who hold a term deposit has decreased by an estimated 36,000 customers according to the latest findings from the Roy Morgan Consumer Single Source Survey.
The decrease in popularity is due to the falling interest rates on term deposits. High interest online accounts or HISA's have increased over the past 12 months by 102,000, with mortgage offset accounts up by 181,000 and bonus interest accounts up a staggering 709,000.
Norman Morris, Industry Communications Director Roy Morgan Research said, "The decline in Term Deposit rates over the past two years has encouraged customers and banks to look at products that can offer a better return as well as other benefits including flexibility, access etc."
According to the survey all major banks lost customers holding term deposits over the past 12 months. Mr Morris, said that in today's market it is of paramount importance for all financial institutions to understand their customer's changing needs and willingness to accept new products.
According to the Mozo database, NAB has the best 3 month term deposit rate of a Big 4 bank on a $10,000 term deposit at 3.15%. By comparison ME Bank's Online Savings account with Everyday transaction account is paying bonus interest of 4.60% for 5 months.
To compare all savings account rates in the market and find a better deal visit Mozo, Australia's money savings zone.