Whether it be a home, holiday or new watch, when it comes to savings Australians are focused on using their money to achieve their dreams.
According to research conducted by ASIC in 2014 savings goals across the country vary greatly from short term luxuries to the all-important “future.”
With literally hundreds of savings accounts on the market, each with unique features, finding the best place to grow your money and achieve your goal isn’t always easy.
One of the most important things to consider – aside from how much you’re trying to save – is how long you have to build your savings stash. The answer will help to determine the type of savings account and investments that are likely to be suitable for your needs.
Goal: short term
If you’re saving for a goal that’s less than one year away, a great option for your money is a high interest savings account that allows you to withdraw your balance without penalty and when you choose.
A savings account, such as the one offered by ME Bank provides an interest rate of up to 3.6 per cent if you sign up for a transaction account as well. Use deals like this to get ahead and earn as much interest as possible in the short time frame that you have.
Alternatively, if you’re a disciplined person who wants to reach a goal quickly, opt for an account which requires a minimum monthly deposit, of say $200, to kick start good savings habits.
Goal: more than one year
Events that arise less frequently, such as a long holiday or a new car, may allow you to lock your savings away for a couple of years.
Opting for an account that only pays you a high interest rate if no money is withdrawn is the equivalent of an adult piggy bank and will help make sure you aren’t cheating on your goals.
BCU offers an account with a maximum interest rate of 3.75 per cent but only if you deposit at least $20 a month and withdraw no more than $5. When the time comes to finally access your money you will thank yourself for your dedication in saving and removing the temptation of withdrawls.
Goal: once in a lifetime event
For the ultimate once in a lifetime event, such as buying a home or your saving for your children’s education, you will really need to step up your savings game. Consider combining a savings account with other money making options such as a term deposit or investing in shares.
With time on your side you have the luxury of exploring different options and finding what will work best for you. Also take a structured approach to saving by tracking your spending and seeing where you can cut down on unnecessary spending.
Using a budgeting app can be a great, easy way of tracking your incoming and outgoing expenses and achieving savings goals as quickly as possible.