Australians have a record $1.32 trillion in household deposits, according to the latest APRA statistics, but many savers are earning less than 1 per cent on their hard-earned cash.
However, seven banks are now offering ongoing savings rates above 4 per cent, according to RateCity.com.au analysis.
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The analysis found that an existing Big Four bank customer with $50,000 in an online saver could have earnt an extra $880 in interest over the past 12 months if they’d had their money in the market-leading account.
If that same person moved $50,000 into a market-leading account at the start of next month, they could potentially earn up to $1,968 in extra interest.
The calculations are estimates and assume the cash rate reaches 3.85 per cent, as forecast by Westpac and ANZ and that banks continue to pass on similar rate increases, as they have previously on these specific accounts.
RateCity research director Sally Tindall said millions of savers had missed out on hundreds, or potentially thousands, of dollars in interest by being loyal to their bank.
“Some savings customers are still on interest rates below 1 per cent, which is ludicrous when the cash rate is 2.85 per cent and the market leaders are now paying 4 per cent and over,” Tindall said.
“You might be kicking yourself for not acting sooner, but it’s not too late to switch and start earning a decent amount of interest. Even switching savings accounts within some banks could quadruple or even quintuple a customer’s rate.”
Tindall said Westpac eSaver customers were getting a rate of just 0.85 per cent, but Westpac Reward Saver customers were getting 3.5 per cent.
ANZ is paying existing Online Saver customers just 0.60 per cent but the same customer could get 3.5 per cent in the bank’s Plus Save account.
“The banks are now willing to offer proactive savers decent rates but they’re still dramatically short-changing complacent customers who have their money in dud accounts,” Tindall said.
“Savers earning less than the cash rate should consider voting with their feet. Banks need deposits to help fund their home loans. The more people switch, the more likely the banks are to chase customers with decent rates.”