How one change could pocket Aussies $800 a year

Aussies are missing out on hundreds of dollars in interest payments due to this remarkably simple mistake.

Wrongly placed loyalty, opening the wrong type of bank account and being disinterested in your savings could be setting Aussies back hundreds of dollars a year, a new report finds.

New data from Mozo revealed millions of Australians are unknowingly giving up hundreds of dollars in interest to the big banks every year.

The research shows Australians with a $25,000 balance over $800 a year in missed interest, by simply choosing the wrong bank account.

Australians could be setting themselves back hundreds of dollars. Picture: NewsWire / Nicholas Eagar

Mozo money expert Rachel Wastell said Australians are losing hundreds every year due to a few simple mistakes they are making.

“There’s likely millions of dollars in lost interest Australians are collectively missing out on just because they haven’t taken five minutes to check their rate or their savings account conditions,” Ms Wastell says.

“Savers may assume their savings are safe or earning high interest, but our research reveals a lack of awareness that means many could be unknowingly sabotaging their own returns.”

Ms Wastell said one of the common mistakes Aussies make is putting their hard earned money into a transaction bank account, instead of a specialised savings account.

According to Mozo, 67 per cent of these types of transaction accounts pay no interest, while only 9 per cent pay more than 0.10 per cent.

Aussies are unaware of the interest rate they are getting. Picture: NewsWire / Nicholas Eagar

In addition, the research found nearly 1 in 2 did not know their savings rate, while 20 per cent were not meeting the criteria to get the bonus interest rates for savers.

“Savers may assume their savings are safe or earning high interest, but our research reveals a lack of awareness that means many could be unknowingly sabotaging their own returns,” she said.

Mozo also warned Australians are loyal to the big four banks, which are unlikely to offer the best savings rates on the market.

“Banks don’t reward loyalty – they bank on complacency, so if you’ve parked your savings in your bank account and forgotten about it, or have a low savings rate, chances are you’re losing out on potential interest,” Ms Wastell said.

“The data shows that those who switch have higher rates on average, particularly those who switch to non-big four banks.”