September 20, 2018

3 benefits of holding a savings account in Australia

Savings accounts in Australia are a great place to grow your money.

All bank accounts at registered financial institutions are covered by the Australian Government’s deposit guarantee scheme.

There are many places you can stash your cash. Banks in Australia are considered very safe and very convenient.

Within a bank you have a range of accounts and products which will accept deposits. Some are good for day to day transactions, others, for long term investing. A savings account is typically a good place to hold your money that you don’t want to invest, or is earmarked for a specific purpose. Here are three benefits of holding not only a savings account but also high interest savings account in Australia.

Government savings guarantee

All bank accounts at registered financial institutions are covered by the Australian Government’s deposit guarantee scheme. This means that if the bank goes bust or takes all the money and runs off, the government will pay back every single dollar.

How much is covered? Up to $250,000 per person with each financial institution.

Now, I’m sure that most of you won’t have $250,000 hanging around your bank account. But, if you do and you want it all guaranteed, simply open a savings accounts across multiple banks and keep no more than $250,000 in each one.

Check with your bank to see if your deposit is covered.

Not so bad interest

Currently, interest rates may seem low. But, Australia’s interest rates aren’t nearly as bad as most other countries. A high interest savings account in Australia will give you one of the best interest rates available.

With a bit of searching you can get a savings account that pays up to 3% interest.

One way of getting a good rate is to ‘follow’ new account opening promotions. Banks will offer a higher rate to entice people to open an account. Open an account and get the great rates on offer, then simply move when your promotion rate gets reduced. But make sure you pay attention to any terms and conditions.

They help you meet finance goals

Savings accounts are typically a good place to hold money that you aren’t investing. There are three reasons for this:

  • They pay the highest interest.
  • They are harder to access.
  • They encourage you to save.

A dedicated savings account, which is separate from your transaction account, is a must for effective saving. You can either set up automatic transfers from your transaction account or in some cases, have money directly deposited.

This is an easy way to save money as you never even get to see it in your account.

While it is easy to get money into a savings account, there are many barriers that make getting it out trickier. This is fantastic! Because, you can’t waste it with a bit of impulsive

online shopping. But make sure you aren’t locking away money that you actually need for important living expenses such as bills and groceries!

Savings accounts will usually also provide incentives for saving, like additional interest.

These are just three of the benefits of holding your money in a savings account in Australia, but, there are more. So, go out and compare savings accounts, then consider opening one to get ahead with your savings.

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