Bank account tip that can help grow your wealth much faster

Rising interest rates are boosting bank accounts, but another simple tweak could help you save 40 per cent sooner.

What name do you call your savings account? Bill? Gwen? Pamela? Or just plain Savings? Or do you instead name it something that may help hit your money goals faster?

Ubank has examined 8000 customers across Australia and found people who rename their savings accounts are shaving 40 per cent off the time it takes to save, compared with those who leave the account with its generic name.

It found 83 per cent of customers have renamed their accounts, with the top names including “Home”, “Car” and “Holiday”, “Christmas” and “Investment”, while people also are using Emojis such as palm trees, rings and presents in their account names.

The bank’s customers are prompted to rename their accounts and can open up to 10 savings accounts with different targets.

Ubank chief product and growth officer Andrew Morrison says naming your bank account “makes it personal”.

“Customers are more likely to stay motivated and on track when they can see a specific and tangible goal they’ve set themselves,” he says.

Cash savings have become more attractive in 2022 as interest rates rise.

“Goal setting is deeply rooted in human psychology. It adds excitement, connection, and meaning to the here and now. Every time customers open their mobile banking app they are reminded of their goals and progress towards them.”

Savings accounts have become more attractive this year as a string of Reserve Bank interest rate rises lift deposit rates towards 5 per cent.

Behavioural economist and author Phil Slade says renaming savings accounts around holidays, cars and other goals taps into people’s fear of loss.

“You have got a salient reminder of what you are going to lose if you don’t save for it,” he says.

“Whenever you spend out of that account you are further away from your goal.”

For couples with joint accounts named for savings goals, the effect can be more powerful, Slade says. “Your spending out of that account is kind of hurting both of you, so you are less likely to do it.”

Slade suggests naming accounts “about the job to be done” and says having several accounts with smaller balances works better than one major savings account.

“You are less likely to spend big, and you give yourself a better indicator of where you are actually at,” he says.

Another mind trick to use on yourself is to avoid thinking about your money as savings, Slade says.

“It’s not trying to save – you are trying to control your spending,” he says.

“Savings always feels like a sacrifice. Flick that mindset around to grow your wealth.”

Ubank’s Morrison says keep account names simple with realistic goals, and it helps to have one savings target for each area of your finances.

“Instead of having three holiday funds, create one for a goal around entertainment/leisure, another for bills/expenses and a third or fourth for travel,” he says.

“This will give you financial stability across key areas of life and help you to stay on track.”

Originally published as Bank account tip that can help grow your wealth much faster