RateCity looks into why Australians are stashing their money and shows you how you can get in on the action.
July 28, 2010
Australians love cooking good food. By following the recipe and adding the right ingredients, your efforts will pay off with a healthy investment at the end. Recently, Australian households have been using this approach and applying it their savings.
According to research from the Australian Prudential Regulation Authority (APRA) of May 2010 figures, the amount of money that Australian households are depositing into banks is on the rise. The research showed the Australian households have more than $457.8 billion in bank accounts. This is an increase of more than $27.9 billion since May 2009, when households stashed more than $429.8 billion into bank accounts. The same time two years prior, in May 2008, $357.1 billion were deposited by households, showing an increase of more than $100.6 billion.
It is evident that Australians have pulled out of higher risk investments such as property and shares due to a volatile market since the global economic crisis, and as a result have been depositing their money into bank accounts. But are you leaving your cash in a low-interest bearing account or are you making the most of unusually high returns that many financial institutions are currently offering?
Australians can earn more with savings accounts
Online savings accounts are one of the safest forms of investing your money, as not only can they offer a higher rate of interest, they can be guaranteed to make a profit.
RateCity recorded that interest rates for online accounts have risen by 1.43 percent from May 2009 when the average online savings account rate for a deposit of $5000 was 3.23 percent to 4.67 percent in May this year. Currently, in July, the average online savings account rate is at 4.85 percent.
Make the most of now
Much like a great meal, online savings accounts are an easy investment when the right ingredients are added. The only ingredients required are an account, some money and then you need to give it some time and let it simmer till it's done (pardon the pun).
Even if you don't have some money put aside, take advantage of great rates for online savings accounts. Currently RateCity's best online savings account is 1.66 percent higher than the current average online saving account rate, allowing you to earn even more. For example, if you deposited $5000 at rate of 6.51 percent with UBank (RateCity's best rate, as at July 26, 2010) then continue to add $200 each month for a year, you could earn over $408 in interest and will save over $7800.
Get your ingredients together, compare savings accounts to start cooking and invest your wealth.