Savings accounts can allow the average Australian to pop money aside for a rainy day or a short or long-term target. You may wonder how much the average person has in their fund and whether yours is keeping pace.
Savvy has done the homework for you, providing you with the data you need to compare your savings to the average Australian. We also let you compare deals to find the best account to grow your savings.
The average Australian savings account balance varies depending on your age. According to a Westpac survey released in December 2021, the average customer has $22,020 in their savings account. The bank said this figure was likely skewed by larger deposit holders and pointed to a “more realistic figure” of $3,559. Westpac says this is the median between $500 and $20,000, meaning half of their customers have $3,559 or more in their savings account.
Balances also tended to increase along with the age of the customer, the survey found. For example, someone between the age of 25 and 34 had an average balance of $7,995, whereas someone between the age of 45 and 54 had $20,165 in their account on average. Across at NAB, a March 2022 survey found that 75% of customers were trying to save, with half holding $1,000 or more in their savings accounts.
According to an Australian Bureau of Statistics (ABS) survey from June 2020, the average household has roughly $26,500 in savings. Middle-income households have about $27,373 in their accounts, while high-income households have $92,179 in savings.
Finding the strongest savings account for your funds comes down to assessing several key variables, such as interest rates and access to your money. By comparing these factors with Savvy, you can get the most out of your money.
The higher your interest rate, the faster your money will grow. Finding a competitive rate can bolster your balance and fast-track the achievement of any savings goal you’re working towards. As an example, say you deposited $700 every month into an account bearing 1% p.a. You’d earn almost $4,900 interest over ten years by doing so. However, if your rate sat at 2% p.a. instead, the interest you’d earn over the same period would top $10,000. Savvy’s savings calculator can give you a fuss-free way to estimate your account’s growth over the years.
Level of access
Savings accounts take many forms, with some of them allowing you easier access to your cash than others. If you tend to lack a bit of financial discipline, opting for a locked savings account such as a term deposit can be an easy way to keep your money out of reach. This will also allow compound interest to work its magic, earning you a return on the money you’ve invested and the interest you’ve already accumulated. You can check how much you’ll earn from your savings account with Savvy’s compound interest calculator.
Regularly depositing to your savings account will allow your balance to grow over time. More frequent deposits can help boost your interest earnings, as interest is usually calculated daily. If you’re only just setting up an account, draw up a budget and work out how much you can comfortably afford to pop aside into your savings regularly.
Monthly account requirements
Banks tend to offer you bonus high interest for meeting certain monthly account conditions. This can be a great way of incentivising your savings, as you know your high interest rate is on the line if you don’t meet the monthly minimum deposit and balance requirements. Comparing with Savvy will allow you to find an account with conditions you can comfortably afford to meet, ensuring you never miss out on your bonus.
Fees and charges
Savings account fees may seem insignificant but, added up over 12 months, can make a dent in the interest you earn. Monthly account keeping fees of up to $5 or paper statement fees of up to $2.50 are just some of the common charges. Comparing accounts will allow you to find one which doesn’t charge monthly fees, encouraging faster growth of your bank balance.
You wouldn’t take out a home loan or buy a car without shopping around, so savings accounts shouldn’t be any different. Comparing with Savvy will help you find a low-fee, high interest account which can earn you the best return and boost your balance.
If you have a linked everyday account, you can schedule deposits to go straight into your savings on the day you’re paid. This can make the process of adding to your nest egg simpler and keeps your savings plan in line with your budget.
Drawing up a budget will allow you to see how much you have left to save once you’ve paid for all of your essentials such as rent, groceries and utilities. This also prevents you from leaving yourself short of funds, as you can budget to save an amount you know you can do without.
If you’re trying to reach a savings goal, finding a savings account with a competitive interest rate will enable you to hit your target faster. Consider accounts with bonus interest or introductory offers. Introductory offers can give you up to six months of high interest, sometimes five times what a standard rate delivers, before reverting to a much-lower base rate.