RateCity has discovered a positive side to the recent rate hikes with great deals for savers.
April 15, 2010
Saving for a particular item or for a rainy day can sometimes be difficult and can take a long time. If you don't have a mortgage, now is a great time to focus on your savings with higher rates for online savings accounts and term deposits.
New research by RateCity found that on average, online savings account rates have increased by almost the entire Reserve Bank cash rate rise of 1.25 basis points, rising by 1.17 percent since September 2009.
"Online savings account interest rates on average are the highest they have been compared to the cash rate since the Reserve Bank began increasing the cash rate in October 2009," said Damian Smith, RateCity's CEO.
"Even though there are some financial institutions that have not passed on the full cash rate rises, there are very good value savings accounts out there which are much higher than the cash rate."
RateCity's top rate today for online savings accounts is set at 5.95 percent with Westpac's Reward Saver, which is 1.70 percent above the cash rate.
"If you deposited $5000 in one of the highest rate online savings accounts at 5.95 percent compared to a lower rate account of 3 percent, you could potentially earn yourself an extra $147.50 after a year," Smith said.
RateCity also discovered that on average the rates for term deposits have increased faster compared to the cash rate. The biggest change was in 12-month term deposits, with a boost of 1.71 percent since September 2009.
"The war for deposits is definitely still raging, and the flipside of the pain for borrowers flowing from the Reserve Bank cash rate hikes is historically high savings rates," Smith said.
"We expect historically high savings account and term deposit rates to continue for most of this year," he said.
"However, as the economy stabilises, these rates will come down closer to the cash rate so it's definitely worth the money you will make by comparing deals online. Too many Australians are leaving money on the table by having large amounts of surplus cash in very low interest accounts, and now's the time to cash in on high rates."