under pandemic-induced restrictions, there has been a sharp rise in cash savings accounts over the past year. As more people are confined to their homes, working remotely, their social life forced onto the back burner. There is an immediate cut down of dinners and cultural outings, after-work drinks, and impulse purchasing as clothing stores, restaurants and pubs are forced to shut down.
Unfortunately, it is not all good news for savers in the Pacific island, as it becomes apparent that some of the biggest banks have failed to make good on their promises like “rapid save” and “no fuss” on the savings accounts they offer. Taking one glance at the returns that are currently being offered by some of the major players in the financial sector, it is clear that it is time for savers to stop accepting near-zero returns on their rainy day fund. For instance, the Bank of New Zealand’s Rapid Save only offers a 0.15 per cent interest on all balances, while the Auckland Savings Bank’s FastSaver, Westpac’s Simple Saver and ANZ’s Serious Saver offer 0.05 per cent.
Still, in reality, the returns on your savings could be far lower than this, since these are rates before tax. This is why one individual, who was promised 0.05 per cent interest, received only 70 cents in returns for a balance of $5000 over a period of five months.
Meanwhile, some of the minor players in the industry offer rates which should very well attract savers looking for a reasonable return on their nest eggs. For instance, challenger banks such as Heartland and Rabobank, pay as much as 20 times the interest rate of that offered by big banks on their savings accounts, while Kiwibank’s notice saver, which does not lock your funds for a period of time, also continues to offer returns at above-market rates.
