Top Tips for Saving a Home Loan Deposit
With the recent RBA interest rate rise, mortgage payments are marching upwards. Many people are starting to wonder if they can ever afford a house. Alongside the continuous inflation of housing prices, potential homebuyers are finding saving for a mortgage deposit frustratingly difficult. Fortunately, there are alternative ways to save that many have overlooked.
Savings Accounts
The simple answer is to invest your money elsewhere. Why not consider investing your money in a high interest savings accountwhere you can store the majority of your money and collect a high interest rate? There is a variety of these accounts available and all you need to do is simply shop around to see which one best suits you.
Online Savers
You may consider an online savings account , which is managed completely online, and has high interest rates, usually around 7%. In obtaining one of these accounts, you are able to link your online saver to your existing bank account for easy transfer of funds between multiple accounts. However, one downfall to this account is that the high interest rate can sometimes be a bonus rate, and only available for a short period of time. Therefore when choosing an online savings account remember to read the fine print, and research a variety of these accounts to find the most appropriate one for you.
Cash Management Accounts
Another option to consider is a Cash Management Account. This account is particularly beneficial to store a large sum of money, such as a mortgage deposit, as the interest rates are tiered, meaning the interest will grow with the amount of money in the account. Another benefit to this account is its transaction capabilities, meaning it can be used similarly to a transaction account with the additional benefit of high interest, indicating that Cash Management Accounts would be best suited to those who wish to avoid the hassle of having multiple accounts.
Term Deposits
A final high interest savings account to consider would be a term deposit . Term deposits are beneficial as they have a fixed rate for a certain period of time, so you don’t have to worry about depositing a large sum of money, or only receiving the high interest rate as a bonus for a short period of time. Term deposits also have a variety of terms to choose from, and have the advantage of being a closed account for this period of time, meaning the money cannot be withdrawn until the term is up. These types of accounts would be profitable to those who are saving for a particular time frame, as they eliminate the temptation to spend the money in the account.
All of the above accounts are offered by a variety of banks; however all of them differ accordingly. Just remember, different banks will have different benefits to their accounts, and the most important thing is to go with the bank and account that suits you. So instead of giving up hope of owning a home, be smart and invest your money, because if the RBA keeps raising rates as they have done lately, getting that initial mortgage deposit without the help of a bit of savings interest may be near impossible for future home buyers.
How do I compare savings accounts?
RateCity.com.au is the best website to shop for all savings accounts, as well as most other financial products. At RateCity.com.au, you can use expert comparative data from CANSTAR CANNEX, Australia’s leading financial research and ratings firm. CANSTAR CANNEX has analysed and evaluated hundreds of financial products to award five stars to only the very best. The CANSTAR CANNEX star ratings go much further than just looking at interest rates. They also take into account important features so you can be confident you are getting the best product.
Use our easy search tools to compare savings accounts at RateCity.com.au.
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