Westpac today announced a new interest rate for young savers that’s leading the competition by strides.
From July 8, the new Westpac Life account will offer up to 3.00% in bonus interest for customers aged 18-29.
It’s 1.15% higher than the nearest competition in ongoing savings, and is well beyond the sluggish 0.70% average savings account rate, according to the Mozo database.
It’s also a nose ahead of the highest youth saver option, Bank of Queensland’s Fast Track Starter Account, which offers 2.85% interest on up to $10,000 for people under 24.
There are a few conditions you’ll need to meet to access this top rate from Westpac. The 3.00% can only be earned on amounts up to $30,000, five transactions via a linked Westpac Choice account must be made each month, and the balance must increase by the end of the month.
However, savers who can’t meet this last criteria will still get a decent 2.40% interest rate.
Westpac has launched this new offering to attract young Australians trying to save a deposit to buy a home.
Recent research from the major bank shows two-thirds of young Aussies are more motivated to save for their first home in light of the economic impacts of Covid-19. This is despite the report revealing younger people are three times more likely to have lost their jobs as a result of the pandemic compared to older generations.
Incidentally, Mozo’s data indicates this is the first time since 2011 that an ongoing savings rate (on more than $10,000) has been greater than the same bank’s lowest non-intro variable home loan rate (in this case the Westpac Flexi First Option Home Loan).