Interest rates are officially at their lowest level, ever. Which means things are grim for savers.
So today I’m going to make sure you are not getting rogered by your bank.
And there’s a lot of it going on:
For example, did you know that, according to comparison site Mozo, banks cut rates on 59 separate savings and term deposit accounts in the month before the latest RBA decision?
That explains why the Financial Review this week reported that 80% of savings accounts are actually losing money after the effects of inflation.
They’re like the Oliver Twist of finance! More? You want more interest? (Ask your parents.)
Okay, so let’s talk basic transaction accounts.
I like a ‘Mark Waugh’ (all-rounder) type of account, which is why I have steadfastly stuck with ING’s Orange Everyday: it has zero fees (including no international fees), makes it easy-peasy to maintain my buckets, and pays decent interest. (Although today ING dropped the maximum interest rate on the account to 2.55%, in line with the RBA’s rate cut last week.)
Yet I’m not paid to promote anyone, so what about the competition?
ME Bank is good, though their tech feels like it was built by the same team who made the Sputnik.
On the other hand, Up Bank (a division of Bendigo Bank) has great tech and offers competitive rates on all your buckets … but it’s still a work in progress as they roll out their feature set.
Now let’s talk Mojo (savings) accounts.
I use UBank’s USaver, which pays 2.87% ‒ although you have to keep contributing $200 a month to maintain that rate. Still, if you’re boosting your Mojo, that works.
And the competition?
Well, there’s a bunch of online savers that pay bonus interest bribes, but they all fizzle out after a few months and revert to lower ongoing rates. Then again, the best of them revert to rates between 1% and 1.8%, which is still better than the vast majority of accounts out there.
Finally, if you want to lock in your money, the best 12-month $100,000 term deposits are with Arab Bank and Teachers Mutual (both at 2.7%), though it’s a slippery-dip from there (say a prayer for the retirees!).
Fact is, cash is trash at the moment, and it’s only getting worse.
Tread Your Own Path!