Aussies are being urged to compare savings rates, as many are forced to raid their savings to stay afloat.
New research by RateCity found 21 per cent of Aussies had dipped into their savings or mortgage offset to get by in the past year.
A further 36 per cent admitted they were now saving less money as the cost of living and interest rates rose.
Around 25 per cent of those surveyed said they had started a budget to better manage rising costs, but only 17 per cent had looked at switching their financial products.
RateCity research director Sally Tindall said the mortgage was an obvious place to start but Aussies shouldn’t finish the task there.
“While the decrease in savings buffers is a direct and intended result of the RBA cash rate increases, Australians need to continuously look for ways to save, and think twice about who they’re choosing to bank those savings with,” Tindall said.
Tindall also recommended Aussies go back over their budget with a “fine-tooth comb” to see if there were any areas where they could make further cuts.
Top savings accounts
RateCity found Aussies could be missing out on thousands of dollars by sticking with the “security” of a Big Four bank.
There are currently 31 banks offering ongoing savings rates above 5 per cent, with ME Bank’s HomeME account offering the top rate at 5.65 per cent.
In comparison, the lowest ongoing rates offered by the Big Four is Westpac’s eSaver at just 1.10 per cent.
If a person with $25,000 moved their savings from the lowest to the highest savings rates, RateCity found they could potentially earn an extra $1,175 in interest over the next year.
“Your money should be working as hard for you as possible. Do 20 minutes of research to work out which account will deliver you the best returns,” Tindall said.
“It may seem overwhelming when you start but, by the time you’re finished, you’ll hopefully get the taste for it and start switching other accounts.”
Max balance for max rate
ME Bank HomeMe
ING Savings Maximiser
BOQ Future Saver (ages 14 – 35)
MOVE Bank Growth Saver
Teachers Mutual Bank/