Shares vs savings accounts

Investors have been tolerating low savings interest rates for four years now but term deposits and savings accounts continue to be very popular. The principal amount is guaranteed by the government – for amounts of $250,000 or less deposited into an authorised deposit taking institution like a bank or credit union. And investors can still get a reasonable rate of return far outstripping inflation by shopping around and comparing deals.

Recent big losses on share markets in Australia and around the world have highlighted how volatile share investing can be. The is one key reason why cash deposits like a high interest online savings account or term deposits remain Australia’s favourite investment.