Savings back in favour with cash-strapped Aussies

It took a global financial shock of a size not seen since the Great Depression, but Australians are finally saving once more, new figures show.

According to the latest statistics, Australians ploughed an impressive $38 billion into savings accounts in the six months up to March 31st, with many people spurred on by the federal government’s cash handouts and deposit guarantee.

The Australian reports that these new bank savings accounts and bank term deposits – which guarantee savings up to the value of $1 million – have been seen as a safe haven at a time when stock markets have flirted with lows not seen in many people’s lifetimes.

Westpac Banking head of retail banking Peter Hanlon said it may take quite some time for people’s faith in stock markets to recover.

"It will probably take half a generation to really lose the fear of the so-called great recession," he predicted.

Earlier this week, Investor Daily’s resident investment expert Vishal Teckchandani noted that in investment circles, 2008 will be remembered as the year that term deposits trumped shares.

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