Aussies are not using their money effectively

Aussies are finding term deposits increasingly attractive, but are we using our money effectively?

The global economic downturn encouraged more people to plough their cash into savings accounts and other funds, as it became clear that a sudden economic dip could leave lots of Aussies in deep trouble.

According to the Australian Prudential Regulation Authority, savers had $550 billion sitting in deposit accounts at the end of April 2012. This is up from $304 billion just five years ago.

This is fantastic, as the government has been calling for people to be more responsible with their finances for a long time.

However, Resi Mortgage Corporation chief executive Lisa Montgomery told News Limited that people can still make their savings work harder.

She said that much of the money would be better used paying off a home loan while interest rates continue to fall.

With the Reserve Bank of Australia cutting the national cash rate again this month, Ms Montgomery's advice is particularly timely.

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