Australians with savings in the bank are getting hit by rock-bottom interest rate deals

SAVERS are barely breaking even by keeping their cash in the bank, new findings show.

SAVERS keeping cash in the bank are getting hit with rock-bottom interest rates — some less than one per cent — making it hardly worthwhile to park cash in online “at-call” accounts.

The Reserve Bank of Australia has kept the cash rate on hold at 1.5 per cent since August 2016 and while this has been a saviour for those paying down debts, for those with cash savings it’s hurt their interest returns.

ONLINE LENDERS: The mortgage deals that will save you money

Latest analysis by financial comparison website RateCity found on $10,000 parked in an online savings account the average maximum rate is 1.9 per cent and is only just keeping at the same level as inflation.

Savers are getting stung by low interest rate returns on their cash in the bank.

But the average base rate — the amount you earn without meeting any additional requirements — is a dismal 0.96 per cent.

This is based on $10,000 being held in the account without any additional deposits or withdrawals being made.

RateCity spokeswoman Sally Tindall said these rock-bottom deals has resulted in a “crippling slog for savers who haven’t seen returns above 4 per cent for years.”

RateCity spokeswoman Sally Tindall said the best online savings rates are around three per cent.

“There are still a handful of accounts that will offer you relatively high interest, at rates of up to 3 per cent,’’ she said.

“However the harsh reality is most savings accounts can’t even match inflation which is a worrying state of play.”

Going on the hunt for a competitive savings account rate can also leave consumers confused by trying to make sense of the tricky terms and conditions.

PROPERTY: Save a house deposit on your own is possible

These can include meeting certain deposit requirements, making tap and go payments or being penalised on their returns if they make withdrawals.

Tribeca Financial chief executive officer Ryan Watson warned savers that “loyalty plays no part in obtaining a competitive interest rate.”

Tribeca Financial chief executive officer Ryan Watson said savers must regularly shop around for decent rates.

“You simply must shop around on a regular basis,’’ he said.

“As with most things, the devil is in the detail — be sure to read the terms and conditions in full, i.e. minimum investment period to obtain bonus interest, for example.”

Savers are also being warned to be wary of enticing bonus rates used to lure them in but often only exist for honeymoon periods before they “drop like a lead balloon”, Ms Tindall said.

BEST CONDITIONAL INTEREST RATES

(Customers must meet certain requirements)

1. RAMS, Savers Account, 3 per cent ongoing. Base rate 1.35 per cent.

2. UBank, USaver with Ultra, 2.87 per cent ongoing. Base rate 1.81 per cent.

3. ME, Online Savings Account, 2.85 per cent ongoing. Base rate 1.3 per cent.

Source: RateCity, note some requirements must be met to get the headline rate.

[e-mail]

@sophieelsworth