Just because savings rates are so low...doesn't mean you need to cop it. Here's how to snag yourself a better deal.
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The official cash rate is at a record low...and sadly, the interest on our savings are faring worse than poor ol’ Jake Gyllenhaal after Taylor Swift’s re-release.
Yup, currently the average savings account interest rate is around 0.1% per annum. That means on a balance of $10,000, you’re earning around $10 annually. That’s about 1.5 coffees.
But that doesn’t mean you need to sit around and cop it. In fact, you can still get a good savings rate...you just have to be savvy, and take action.
We know, we know...BORING! Who wants to spend their days researching the best savings rates? But the truth is, doing your ground work and finding out the best rates on offer could mean hundreds of dollars in extra interest on top of your savings.
The good news is, it’s super easy to do. You can just do some simple desktop research by heading to comparison sites.
Some will ask you to plug in some details like your savings account balance and your monthly deposits to give you a better indication of what would work for you.
Yup, this is a ‘lil daunting, Flux fam. But, think about it like this: when you walk into a clothing store...you generally ask the shop assistant if there are any sales going on at the moment. And they can reply ‘yes’, or ‘no’.
It’s the same deal. Once you’ve done your research, you should give your bank or lender a call, and try to negotiate with them.
You can ask them to match the best rate you’ve seen, or to simply offer you something better.
If you’re not sure what to say…try this:
“Hi there, I’ve noticed the best savings rate on the market for someone in a similar position as me is ‘X’. I was wondering if you would be able to match this rate?”
If they say they can’t, try pushing back with: “Are you able to offer me a better rate than what I am currently receiving?”
If they still say no, it's time to pull out the Draw Four. Try saying: “I am considering switching lenders to receive a better interest rate - are you sure there is nothing you can offer me today?”
At that point, your lender may be singing a different tune.
If they aren’t, then it’s time to whip out the big guns.
Sounds annoying...and difficult. But it ain’t! Many banks and lenders offer promotional rates to newcomers, and often they can be significantly higher than the base rate.
Banks also offer bonus saver accounts to reward customers who meet certain conditions, like a minimum monthly deposit...spending through a linked transaction account...and not making regular withdrawals. These accounts tend to have higher interest rates on top of the base rate.
Just make sure you read the conditions of the promotional and bonus rates and ensure you meet them.
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