3 ways the end of summer is helping your savings

3 ways the end of summer is helping your savings

The winding up of summertime is typically bittersweet.

On the one hand, it represents the passing of time and the progression of the year into bigger and better things – working towards meeting those New Year’s resolutions, perhaps.

On the other hand, the great Australian summer is an institution — no one likes to see the end of unrelentingly sunny days, backyard cricket tournaments and hours spent lounging on the beach. After the glorious warmer months, it can be difficult to transition back into any other season.

One thing that might somewhat cushion the blow of summer’s absence is the effect it could have on the state of your savings account. As good as summer is, there are a number of expenses associated with it that we won’t feel sad to see go. 

No more going on a summer holiday

Unless you’re a contractor or casual employee, the coveted Australian summer holiday is an annual must-do. It’s a time to unwind, have a stress-free week or few and make the most of what the season – and Australian geography – has to offer. 

Unfortunately, it also tends to cost a pretty penny. According to research released by the Tourism and Transport Forum, the average Australian family expected to spend just short of $1,400 on their main summer holiday. This varied depending on which state respondents were from, with Victorians expecting to spend the highest, at $1546, though those from New South Wales, South Australia and Western Australia were not far behind. 

Just think what you could do with all that money! Rather than of spending it on accommodation, eating out and tourist experiences, you could put it into a high interest savings account instead.

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Cool down your energy spending

Australian summers are known as much for their ferocity as for their fun factor, with many of us relying on technology to keep ourselves comfortable when the mercury rises. This can add a fair amount to our power bills by the time the season is over. 

According to 2015 stats from YourPowerQld.com.au, a joint initiative of Ergon Energy and Energex, blasting that air conditioner can end up costing you as much as $707 per summer. This isn’t just a private cost. Summer adds expenses to businesses too, with the Energy Efficiency Exchange estimating that heating, ventilation and air-conditioning are responsible for around 25-50 per cent of a business’ energy bills. 

By contrast, you might find it easier to keep warm during winter without resorting to appliances, such as by wearing warmer clothes and extra layers, leaving the door open when you take a shower, exercising and even just good old fashioned blankets. 

Less opportunities to pull out the wallet

Even apart from these factors, summer tends to be a month of higher spending. When the weather’s good and everyone’s more sociable, there’s more opportunities to pull out the credit card and spend, whether it’s a simple stroll turning into a shopping trip, or deciding to eat out at a fancy restaurant to enjoy the beautiful weather. 

An eZonomics poll from May 2014 found as much, with a sizeable majority — 55.2 per cent to be exact — nominating summer as the season in which they spend the most money. There’s a psychological reason for this. A joint study between the University of Alberta School of Business and the University of Winnipeg Faculty of Business and Economics found that as exposure to sunlight increases, so does consumer spending. More sunlight improved individuals’ moods, which made consumer products more attractive to them. 

So as summer gradually comes to a close, you can take solace in the fact that your bank accounts will at least be happier in the coming months. And while you’re at it, start comparing term deposits and see how you can make the most of what you save. 

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Learn more about savings accounts

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit ingdirect.com.au.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

What is a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

What are the two types of NAB locked savings accounts?

With a locked savings account in NAB, you can earn bonus interest and learn financial discipline. NAB offers two types of locked savings accounts, each with their own terms and conditions.

The NAB Reward Saver account pays a variable base interest rate of 0.05 per cent per annum and a bonus interest of 0.55 per cent. You’re eligible for the bonus if you make a minimum of one deposit on or before the second last banking day and have no withdrawals in the month.

Meanwhile, the NAB iSaver account provides 0.05 per cent as the standard base interest rate and a fixed bonus margin of 0.55 per cent during the first four months from the date of opening the account. You can park your cash in the account and enjoy unlimited monthly transfers between linked daily bank accounts without impacting the interest rate.

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details