Yahoo Finance Aussie savers getting 'raw deal' from interest rate hikes
Interest rates have increased 4 per cent, but banks aren’t passing this on to all their savings accounts.
Aussies are being urged to ‘be picky’ when it comes to their savings accounts, with some savers missing out on close to half of the Reserve Bank’s interest rate hikes.
Aussies with money stashed in a regular savings account with no bonus or introductory offers, are the group losing out the most.
Canstar found regular savings accounts had increased by just 2.21 per cent, on average, since the rate hikes started in May 2022. This is compared to a 4 per cent hike to the cash rate over the same period.
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“Savers should do well in a rising-interest-rate environment, and some are, but there is a whole group getting a raw deal,” Canstar group executive financial services Steve Mickenbecker said.
“Savers who have their money in a regular savings account … are setting and forgetting their way to substandard interest returns when they should be on the winning side of rate increases.”
Savings with a catch
Aussies with an introductory or bonus savings account are faring better, with interest rates increasing 4.27 per cent and 3.60 per cent respectively over the same period.
But these accounts come with catches. Introductory savings accounts are only available to new customers and the higher interest rate is only offered for a limited time. Bonus savings accounts have monthly conditions that need to be met, otherwise the rate drops to a lower amount.
Mickenbecker said savers could either find an account that paid a high-interest rate and had bonus conditions they could meet each month, or they could shift banks every few months to earn introductory rates.
“Either way, life has become more complicated for those wanting a return on their savings,” he said.
The best savings rates available
Canstar’s database shows there are 22 providers that currently offer interest rates of 5 per cent or more.
“Savers should be picky when it comes to choosing where they park their savings, they need a bank that offers a reasonable interest rate,” Mickenbecker said.
“It has never been easier to switch banks, and the government guarantees bank deposits up to $250,000, which removes the fear factor of where you choose to stash your savings.”
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