More than half of all Australians are stashing their cash in high interest savings accounts, driven by a surge in Gen Zs looking to make their money work harder for them.
New NAB data released today reveals nearly two thirds of younger Australians between 18 and 29 years old have placed their savings in a high interest account, compared to just half of Australians aged over 30.
NAB Personal Banking Executive Kylie Young said younger Australians overwhelmingly want to buy and invest in property but those who are being priced out of the market or were trying to save larger deposits were seeking more rewarding places to put their hard-earned money.
“Younger Australians are stepping up to the challenge and taking the opportunity to stash their cash in high interest savings accounts and grow their money,” Ms Young said.
“Gen Z want to secure their future, ensure their own financial wellbeing, and contend with rising living costs, and they’re choosing to put their money into high interest savings accounts.
“High interest savings accounts can be a safe, smart and stable way to manage your money, providing ready access to funds if they’re needed as well as a rewarding interest rate.”
Over the last 11 months, interest rates on several high interest savings and term deposit accounts have increased around 4.00%, a move Ms Young said was providing Australians with more rewarding returns.
“It’s a very competitive market for savers, so now is a great time to shop around and find the best rate and product features that work for you,” Ms Young said
“Another option for those with a home loan is to put your savings into an offset account, giving you easy access to those funds while saving on interest and helping to pay off your mortgage sooner.”
22-year-old Maya McIntyre from Victoria has her savings in a high-interest account, where she’s continuing to grow her balance thanks to higher interest rates.
“It’s really important to me to be able to save money now and put it away for the future, whether that’s a house, a holiday or money for a rainy day.
“I want to be able to see my funds and access them easily if I need to, and at the same time get the interest paid monthly,” Ms McIntyre said.
The research also revealed insights into where Australians are keeping their money:
- Overall, 55% of all Australians currently have money in a high-interest savings account.
- More than a quarter (26%) of Australians are keeping their savings in cash. More men (30%) than women (22%) are holding onto cash but only 10% think it’s the best thing to do with it.
- A quarter of younger Australians (25%) want to invest in property – more than any other age group.
- With a guaranteed, set income, term deposits are four times more popular with older Australians (aged 65+, 29%) than younger Australians (aged 18-29, 7%).
- While 22% of Australians think the best thing to do with their savings is to offset their mortgage, only 15% of Australians are doing so.
NAB continually reviews its savings rates and has made more than 60 increases across savings products in the past 12 months, including on NAB Reward Saver, NAB iSaver and NAB Term Deposits. NAB’s latest savings and deposit rates are available here.
For those looking for practical support to improve their financial wellbeing, NAB has a range of tools including a budget planner and expense tracker available at nab.com.au.
Notes to editors:
- NAB survey of 2,000 Australians between 17 February 2023 and 8 March 2023.