Aussies could be missing out on $3.6 billion in interest

November 22, 2010

If you currently have money sitting in a savings account you could be one of the many people missing out on your share of $3.6 billion of unclaimed interest. But there is good news: all you need to do is switch accounts and find a better deal to get your share.

More people are earning less interest
According to the Australian Prudential Regulation Authority (APRA), Australian households had $477.8 billion sitting in bank accounts in September 2010. What a large portion of these people don’t realise is that they could be missing out on free money.

For instance, RateCity discovered that out of the 91 online savings accounts they currently monitor, almost half (46 percent) offer an interest rate of less than 5 percent at an average interest rate of 4.36 percent (as at November, 2010).

RateCity calculated that if these people switched their savings accounts to a higher rate of 6 percent, for instance, collectively they could earn themselves $3.6 billion more in interest with a higher interest account.

How to get in on the action
To claim your share of the $3.6 billion of free money available, all you need to do is look for a savings account offering a higher interest rate than what you are currently getting, by shopping around and comparing savings accounts online at financial comparison websites, such as RateCity.

For instance, RateCity discovered there are 21 savings accounts offering interest rates of 6 percent or more, with the highest online savings account by Virgin Money at 6.75 percent. If you were to deposit an initial amount of $2000 then deposit $100 each month, in one year you could earn yourself nearly $60 more in interest (compared to the average rate of 4.36 percent) just by transferring your money over.

When searching for the best account for you, make sure you read the product disclosure statement (PDS) so you are aware of the terms and conditions of the account. For instance some financial institutions offer higher rates for a limited time only, after which the interest rate reverts to a lower amount.

Don’t miss out on your share of the $3.6 billion pie. All it takes is around half an hour out of your day to shop around and find a savings account that will start earning you more. Once you make the switch it won’t be long before you start to see your money flourish.

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