Savings accounts are booming, but is yours any good?

Posted: 24 May 2021 8:50 am
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Almost a quarter of Australians started saving more during 2020, new research reveals.

While the coronavirus pandemic wreaked havoc with Australian finances, it did have one upside: We're getting better at saving.

New research data from the Commonwealth Bank suggests that the pandemic jolted many Australians into saving more regularly.

Almost a quarter (24%) said that the pandemic had a "positive" impact on their savings habits, according to the newly-released CommBank Consumer Insights Report.

Another 37% said they had seen no change, while 39% said there had been a negative impact.

"These findings reflect adverse employment outcomes for 27% of Australians with a similar proportion accessing JobKeeper or JobSeeker (28%)," the report noted.

The savings habit is pretty well ingrained in Australia.

The average Australian saves $764 per month and has $28,727 in cash savings, according to Finder's Consumer Sentiment Tracker.

Around 82% of Australians say they save money every month, the tracker found.

That enthusiasm comes despite the fact that high-interest savings accounts actually haven't been paying very high rates of interest over the last two years. The low RBA cash rate has led many banks to repeatedly cut interest rates on savings accounts. It's difficult to find any rate above 1.00% per annum.

One recent exception is MyState Bank, which recently increased its savings account interest rate to 1.20%. To earn that rate, you need to deposit $50 a month and make five debit card transactions.

That's unlikely to be a challenge, given our increased shift towards cashless transactions. The CommBank report found that 39% of mobile wallet users increased their usage during the pandemic.

Another key trend highlighted by the report was a boom in online shopping.

"We've seen Aussie businesses adapting to consumers' changing needs and their customers have noticed," said Commonwealth Bank's executive manager for consumer and diversified industries Jerry Macey. "There is goodwill among customers and an overall perception that the retail experience has improved across online, in-store and delivery services."

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