Westpac has revealed that from today, young Australians will be able to access new bonus savings rates on their Westpac Life account of up to 3 per cent per annum where they are growing their savings.
The rate will remain up to 2.4 per cent per annum where the account is not grown month-to-month.
According to the fine print, the savings rate offer is available to both new and existing Westpac Life and Choice customers aged between 19 and 29 years old on balances up to $30,000.
Customers must also make five eligible purchases with a debit card that is linked to their Westpac Choice account each month.
According to Westpac’s head of savings and investments, Kathryn Carpenter, the bank has recognised the “unique financial challenges this generation is facing and the flow-on impact this can have to future wealth building, like buying a home”.
“Building savings can already be challenging for young adults who are only just starting their financial journey, particularly in an environment like this where many are also now navigating changes to their income or employment,” she commented.
The announcement from Westpac about the improved savings rates comes despite the RBA’s maintenance of the official Australian cash rate at record lows.
Westpac’s own research has recently found that despite such low rates, the pandemic “has made younger Australians sharpen their focus on saving for the future”.
Nearly half (49 per cent) of 18 to 29-year-olds surveyed by Westpac revealed they are now planning to save more than they did prior to the pandemic, while a whopping 85 per cent have chosen to either cut back on spending or hold off on large purchases to protect their cash savings.
This is in spite of the same research finding that Australians under the age of 30 are three times more likely to have lost their job, and nearly twice as likely to have taken a pay cut or be working less hours compared with older groups.
Ms Carpenter acknowledged that despite being a difficult time, “it’s encouraging to see Australians are embracing this as an opportunity to get on top of their finances and make some positive changes”.
“Most of us have spent more time than ever before at home over the past few months. It’s clear this has been a turning point for many younger Australians, who are thinking more about owning a space of their own in the future and prioritising saving for a deposit,” she commented.
Westpac also revealed that the pandemic has improved the motivation of young people to purchase property, with two-thirds of the 18 to 29-year-old respondents considering that they are now more motivated to save for their first home.
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