Save
What the banks don’t want you to know about your savings
Comfort and the wisdom of the crowd often inform the biggest investment decisions of Australian investors, meaning money-making strategies are left on the backburner.
What the banks don’t want you to know about your savings
Comfort and the wisdom of the crowd often inform the biggest investment decisions of Australian investors, meaning money-making strategies are left on the backburner.
Australia’s strong consumer protection laws and other protections like the $250,000 deposit guarantee provide a rightful comfort to consumers.
However, with this comes a tendency to not actively search for a better deal or understand the bargaining power at your fingertips.
The deal we have with the big four
Banks, or deposit-taking institutions, loan out money that is left under their control from Australian consumers. They do this, in short, to make money. What they don’t do to make money is leave cash sitting in an account.
This basic fact alone should indicate to consumers that their money can work significantly harder for them if moved around the market or invested into vehicles that aren’t idle accounts.
“The banks have done a phenomenal job in creating this perception that you’re leaving your money somewhere, or depositing your money. What you’re really doing is lending money… for which they pay you very little,” said Mayfair 101’s James Mawhinney.
“We have all seen how much profit the big four have made in the last few years, which has meant the savers are... being hard done by on the rates,” said Mr Mawhinney.
An increase in savings rate – have consumers got it wrong?
In the March quarter, the savings rate for Australian consumers rose as investors began to park more money aside for a rainy day.
Mr Mawhinney believes consumers that are better educated about where their money is going would have done more with their money than leave it in a bank.
He encourages Australians to think outside of their known comforts and consider alternatives on the market. These should be aligned with risk appetite and strategy.
“I don’t think they have it wrong; they have made the best decision at the time with the knowledge that they have,” said Mr Mawhinney.
“The people that have done very well historically in life are the people that have educated themselves best. For those people that educate themselves on alternative investments will find there’s an enormous amount,” continued Mr Mawhinney.
This email address is being protected from spambots. You need JavaScript enabled to view it.
About the author
About the author
Savings account
COVID-19 sees Aussies reach record-high wealth
New stats have revealed that Aussies are now richer than ever, having stashed away their cash during a year marred by the COVID-19 pandemic and the resulting economic shutdown. ...Read more
Savings account
Saving more during the pandemic? Here’s where that money should go
If you’re finding that you’re saving more during the pandemic, you’re not alone. ...Read more
Savings account
Aussie savings goals put on hold due to COVID-19 pandemic
The COVID-19 pandemic has seen Australians being forced to dip into their life savings, which is impacting their ability to achieve financial goals, new research has found. ...Read more
Savings account
The 4 types of COVID-19 consumers: Which one are you?
Australians are still living in fear of worsening economic conditions, with a study revealing changed spending behaviours across the board despite varying levels of individual financial impact. ...Read more
Savings account
Are you a victim of financial abuse? 22 questions to consider
An “invisible” form of abuse, family violence that uses money as a method of control and coercion, is a real issue in Australia. ...Read more
Savings account
Another $750 payment on way for pensioners
From today, the second cash payment that has formed part of the Australian government’s economic response to the coronavirus will be made available. ...Read more
Savings account
Big 4 bank busts out 3 per cent savings interest rate
But not everyone is eligible for the new rate, which is far beyond anything else on offer from an Australian bank. Are you? ...Read more
Savings account
Bank balances reveal Aussies are prepping for life post-COVID
Australians are bunkering down for life post-COVID-19, with new analysis revealing median bank balances are up 45 per cent from the pre-pandemic period. ...Read more
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
The continued property boom, ethical investing and engaging with your super fund
Listen now
Savings account
COVID-19 sees Aussies reach record-high wealth
New stats have revealed that Aussies are now richer than ever, having stashed away their cash during a year marred by the COVID-19 pandemic and the resulting economic shutdown. ...Read more
Savings account
Saving more during the pandemic? Here’s where that money should go
If you’re finding that you’re saving more during the pandemic, you’re not alone. ...Read more
Savings account
Aussie savings goals put on hold due to COVID-19 pandemic
The COVID-19 pandemic has seen Australians being forced to dip into their life savings, which is impacting their ability to achieve financial goals, new research has found. ...Read more
Savings account
The 4 types of COVID-19 consumers: Which one are you?
Australians are still living in fear of worsening economic conditions, with a study revealing changed spending behaviours across the board despite varying levels of individual financial impact. ...Read more
Savings account
Are you a victim of financial abuse? 22 questions to consider
An “invisible” form of abuse, family violence that uses money as a method of control and coercion, is a real issue in Australia. ...Read more
Savings account
Another $750 payment on way for pensioners
From today, the second cash payment that has formed part of the Australian government’s economic response to the coronavirus will be made available. ...Read more
Savings account
Big 4 bank busts out 3 per cent savings interest rate
But not everyone is eligible for the new rate, which is far beyond anything else on offer from an Australian bank. Are you? ...Read more
Savings account
Bank balances reveal Aussies are prepping for life post-COVID
Australians are bunkering down for life post-COVID-19, with new analysis revealing median bank balances are up 45 per cent from the pre-pandemic period. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
