February 4, 2010
At the top of many lists of new year resolutions will be to save more money. The results of a recent survey by RaboDirect, however, show we’re far from a nation of savers.
Just 13 percent of Australians have savings, while just over one quarter of those with savings would last just two months if they lost their job. This is an alarming statistic.
The good news is it is easy to turn around. Nearly half of the population put their money into a transaction or savings accounts.
"So while many people are doing the right thing by saving regularly, they are putting it in the wrong accounts – accounts that pay little or no interest and come with fees," RaboDirect general manager Greg McAweeney says.
He says if you put away $200 a month into a high-interest savings account over 12 months (based on a 6.10 percent variable interest rate), you could earn $68.25 in interest and a total of $2468.25 by the end of the year.
The right fit savings account
The key to a good high-interest savings account is to work out what’s best for you, so compare interest rates, find out how easy or hard it is to access money from the account and fees and charges. After all, there’s no point saving money if most of it is taken in fees.
Interest rates for the top five savings accounts fetch up to 6.51 percent, but beware, accounts with the highest interest rates might not always be the best for you.
And although it might not sound like a good idea to put a lock on accessing your money for a period of time, this encourages you to leave it alone.
Tips for a good savings plan
McAweeney also warns some accounts have an bonus rate and you need to look at the terms and conditions. For example, how long the bonus rate lasts and what the standard rate will be after it expires.
McAweeney also advises to:
- Have your salary paid directly into a high-interest savings account.
- Set up a regular savings plan.
- Consider term deposits for money you won’t need to access in the short term.
It doesn’t matter how much you save, the key to successful saving is getting into the habit. Soon, you won’t even miss the money and can increase how much you save.
For other savings tips, head to the government’s Understanding Money site or see our other savings accounts news and features.