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$3,285 cash boost for savers as expert warns against this money mistake

Two in three Aussies say they don’t know their savings interest rate and it could be costing them thousands.

Aussies could give themselves a $3,285 cash boost by switching to a better savings account, as millions admit they are making one basic money mistake.

Two in three Aussies - or about 13 million people - say they don’t know their current savings interest rate, new research by Finder found, and it could be costing them thousands.

The average savings rate currently sits at 2.05 per cent, but Aussies could be earning more than double that with the highest rates well above 5 per cent.

Australian money, cash boost and savings.
Aussies could get a cash boost by switching to a savings account with a higher rate. (Source: Getty)

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Finder head of consumer research Graham Cooke said it was concerning that most savers didn’t even know their savings rate.

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“In a high-cash-rate environment, savings accounts offer the best value,” Cooke said.

"Right now, if your savings account doesn’t have a 5 in front of it – ideally followed by another 5 – you are paying the loyalty tax.”

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How to get a cash boost

The average Aussie has $36,107 in savings, according to Finder, and is putting away $730 per month, on average.

That means the average Aussie could make an extra $3,285 in interest over two years if they switched from an average savings account to one with a rate of 5.5 per cent.

While this is the average amount of savings people have, it’s worth pointing out that some don’t have as much of a buffer to fall back on.

The comparison site’s data found a staggering 38 per cent of Aussies said they didn’t have an emergency fund to help cover unexpected expenses, while nearly half said they could only live off their savings for four weeks or less if they were to lose their main source of income.

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Top 6 savings rates

Even if you have a smaller amount of savings, it can still be worth switching to an account with a higher interest rate to make the most of your savings.

Here are the top 6 ongoing savings rates available to all Aussies:

  1. ME HomeME Savings Account – 5.55% (up to $100k)

  2. ING Savings Maximiser – 5.50% (up to $100k)

  3. MOVE Bank Growth Saver – 5.50% (up to $25k)

  4. AMP Saver Account – 5.40% (up to $250k)

  5. Virgin Money Boost Saver – 5.35% (up to $250k)

  6. St.George, Bendigo Bank, RACQ, Bank of Melbourne – 5.25%

Make sure you are aware of any bonus terms and conditions that apply, including things like minimum deposit amounts and growing your balance each month.

“It’s important to beware of savings accounts which offer a high bonus rate only for it to disappear after a few months,” Cooke added.