skip to content
Our trading hours are changing over the festive season. The RaboDirect Contact Centre will be open to assist you from 8am to 5.30pm Eastern Standard Time on business days between the 23rd of December and 31st December inclusive, excluding all national public holidays. We will be returning to our standard operating hours from the first business day in the new year, operating from 8am to 7pm Eastern Standard Times on weekdays.
RaboDirect
 
Share

Switch and earn free interest

Tags Financial Planning Saving for a Home
Category Save

Australians are missing out on more than $4 billion in unpaid interest each year by keeping their money in low-interest bearing accounts.

According to RaboDirect research, this amount could even be somewhat conservative: the actual figure as high as $6 billion.

The issue is clear – too many people are using the wrong accounts to house the bulk of their money, either could be due to being unaware of the market or simple inertia.

Thankfully the solution to the problem is just as simple – consumers need to take action.

Rather than leaving money lying idle in a low-interest everyday transaction account, switching surplus savings to a high interest savings account could essentially result in ‘free money’ in the form of interest.

Several transaction accounts pay zero or low interest and are dressed up and sold as ‘savings’ accounts to the detriment of the consumer.

Data shows that Australians are doing the right thing by saving more – but by not using the right account they are doing themselves a disservice.

At present a genuine savings account should be offering around 6% interest, and if it isn’t you should be asking why.

Another sign of a genuine savings account is that you won’t in most cases be able to access your money via an ATM; however, they can be linked to an everyday transaction account that allows you to easily transfer money between accounts when you want to access it.

Consider having your salary paid directly into your high interest savings account, where it will earn more interest, and then transfer the amount you need to cover your everyday transactions and bills into your linked account so you can get your hands on it quickly if need be.

It’s that simple!