Savers told to lock in high rates now

12/12/2011

Infochoice says the top rates on offer last week for 12-month term deposits were about 5.75 per cent, while for online savings accounts they were about 6.2 per cent. Higher savings levels among consumers combined with lower credit demand has given banks less incentive to offer the higher rates of a few months ago.

People's Choice Credit Union managing director Peter Evers says for most of the past year, deposit account interest rates were well above their usual levels compared with the official RBA cash rate. Term deposit and online savings account rates have dropped up to 0.55 percentage points in the past month - double the Reserve Bank of Australia's November rate cut of 0.25 percentage points.

"There seems to be less pressure now to offer the highest possible rate," says Infochoice spokesman Dirk Hofman who sees an uncertain outlook for savings interest rates. "It's a volatile time and very hard to make predictions, as it depends on what's happening in international markets and if there's any downturn in the Australian economy," he says.

Hofman's message to savers is to shop around. "Don't let your money go lazy," he says. "After four or six months, you need to look at whether the rates for your product are still attractive."

Source: Courier Mail