What does the RBA’s June hike mean for savers?

Despite many thinking there would be a pause, the RBA has once again hiked the cash rate, raising it up to 4.10% at the June meeting. For borrowers, that means more pain. However, if you’re only a saver, now may be a particularly advantageous time. 

So, the question is, how can savers take advantage of the situation?

How savers can take advantage of the RBA’s rate hike

So how can savers make the most of things? 

One important thing to look out for are announcements from banks for which interest rates they’re planning on hiking. For savers, this means looking out for term deposit and savings account hikes.

Another thing to keep in mind is that you’ve got your finances in order. Due to tougher economic conditions, savers will probably have to tighten their belts to maintain their regular deposits. 

Something to consider is have you made yourself a realistic budget and set your financial goals? Not only do these things help you keep on track but can also help you see where overspending may be occurring.

Remember, for compound interest to take effect, you need also make sure that you’re constantly and consistently contributing to your savings—that’s really hard to do if you’re living paycheck to paycheck

Finally, If you haven’t got one already, you should consider opening a high interest savings account—especially as many are likely to hike their rates further. 

Keep in mind that higher interest savings accounts tend to be for a bonus interest rate, meaning that they require conditions to be met or they will revert to a (usually much lower) base rate. So, always make sure the savings account you’re getting has a great interest rate but also a bonus rate condition that is achievable for you. 

Not sure which savings account is the right one for you? At Mozo, our database has comparisons on loads of high interest savings account providers so that you can get the account that works best for you.