Do you dip into your savings? Some of the top-rated savings accounts in June 2024

While many Australians have been stashing money in the bank to take advantage of higher interest rates, others have been dipping into their savings to better manage cost of living pressures. Depending on your saving goals and financial situation, it could be worth comparing savings accounts to find out if an alternative option could better suit your needs.

According to data from the Australian Prudential Regulation Authority (APRA), Australians deposited $4.69 billion into term deposits, transaction accounts, mortgage offset accounts and savings accounts in April 2024. This brings the total amount saved from households $1.474 trillion – a new record high – and means household deposits have now risen by over $200 billion since the start of the rate hikes in April 2022.

However, according to the Australian Bureau of Statistics (ABS), Australian households only saved 0.9% of their income in the March 2024 quarter. This resulted in total savings remaining below 2.0% for the year, which hasn’t been seen since March quarter 2008.

This could be partially attributed to household spending also rising by 0.4% in the March quarter. This rise could itself be partially attributed to higher spending on essential services, with spending on electricity and gas rising 4.9%.

The best savings account options for managing your money may vary depending on your financial situation. If you’re able to make regular deposits and minimal withdrawals, you could be able to take advantage of conditional savings accounts with bonus interest rates. But if you’re likely to dip into your savings and may not be able to make regular deposits to grow your balance, a standard savings account with a high base interest rate could let you earn interest on your wealth while still offering some flexibility.

You could also consider putting some of your savings into a term deposit to earn a fixed amount of interest over a predetermined length of time. Because this money will be locked into the account, it’s harder to succumb to the temptation to spend your long-term savings. Plus, because the interest rate is fixed, you won’t need to worry about falling interest rates from affecting your future savings goals. Of course, this must be balanced against the fact that you won’t have the flexibility to easily access the money in a hurry if you really need it, and you’ll only earn simple interest, rather than compound interest, meaning it’s not as easily to build your wealth by earning interest on interest.

RateCity’s Real Time Ratings™ could help you compare savings account options, as they combine the cost and flexibility of different savings accounts and are updated regularly for accuracy. The top-rated savings accounts on RateCity’s Savings Account Leaderboards may also be eligible for a RateCity Gold Award.

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