Savings rise thanks to 'risk-averse' households

Australia's "risk-averse" households have given the country a major savings boost, the Reserve Bank (RBA) has said.

Speaking at the Australian Business Economists' annual conference, RBA assistant governor Philip Lowe claimed that the current strong savings trend had reversed the decline seen between the end of the 1980s and 2003 and had led to greater savings than those achieved by more pessimistic US households.

He noted that the country's commodities boom and its strong national terms of trade had provided a huge boost to national income that had largely been saved, rather than spent, by conservative Australians. Savers looking for good returns on their funds can choose to compare term deposits in search of the best returns.

Dr Lowe also stated that the RBA was hoping to see Aussies save more and borrow less in order to help combat inflation.

"If this were to occur, not only would it lead to a lowering of risk in household balance sheets, but it would reduce inflationary pressures during the period of high investment," he said in comments reported by the Australian.

This article is brought to you by Mozo – Helping you compare term depositsADNFCR-1761-ID-800282237-ADNFCR