Times have actually been tough over the previous 2 years for customers with the RBA raising the money rate to 4.35%, but for savers it hasn't all been bad news. During the pandemic, when the RBA decreased the money rate to.1%, savers were essentially going backwards as soon as inflation was taken into consideration, but as the money rate has risen over the past two years, so has the rate of interest on cost savings accounts– with some of the very best offers now starting well above 5%.
However, some banks have actually been slower to pass these rate increases onto the $1.4 trillion in nationwide savings accounts, while passing them right away onto debtors with home mortgage. In 2015, the ACCC examined how Australia's loan providers set rates for loans and deposits, and the federal government has actually acted on its suggestions with a suite of proposed steps to make it simpler for customers to understand financial items and when there is a better offer on a rate of interest.
Part of the federal government's new steps will include requiring banks to release alerts for rates of interest modifications on cost savings and deal accounts so consumers understand the terms of their introductory rate duration and, most importantly, when it ends or the rate changes. As the ACCC's Retail Deposits Inquiry exposed, some 79% of Australians have a savings account of some kind however the large majority of these accounts– 71%– did not accrue any bonus offer interest through the first six months of 2023.
“Regardless of the significance of deal accounts, cost savings accounts and term deposits, the ongoing challenges consumers deal with in looking for, comparing, and changing between items suggests that customer engagement with the marketplace for retail deposit items is relatively low,” the report noted.
“This low level of engagement suggests many consumers lose out on making more from their savings.”
That is why it is very important to do your research study periodically to identify whether you're fulfilling the conditions to accumulate interest and whether preferable– and higher paying– options have become available. Think about setting a date in your calendar every 3 to 6 months to evaluate your cost savings account and others on the marketplace.
