Savers losing out on interest rates

Australians are losing out on more than $1 billion in savings’ interest over the past six months, according to a study by InfoChoice.

The study showed that Australians have nearly $144 billion of savings that is not earning the best interest rate. It showed that those who continually switch their savings to accounts offering the highest interest rate would have reached an interest rate of 6.44 per cent over the past six months, compared to an interest rate of 4.61 per cent for those who deposited their savings in one of the four major banks.

Australians who place their savings with one of the four big banks account for 70 per cent of all savings accounts in Australia.

“At a time when all deposits are guaranteed by the Federal Government and AAA-rated, there is no better time for Australians to be searching for the best possible deal,” InfoChoice chief operating officer Adam Rigby said.

Online bank one direct had an average interest rate on savings accounts of 6.12 per cent in the past six months, followed by Member’s Equity Bank at 5.76 per cent, Elders Rural Bank at 5.53 per cent, and Raboplus.

Rigby also warned consumers that they need to be careful of promotional interest rates that come with an increasing number of conditions, including limiting the offer to new customers or a specified time period, enforcing minimum and maximum balances, and requiring a linked transaction account.