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Currently, if you deposit your money in a savings account in a bank in Australia you will hardly get any return. The interest rate has dropped below 1 per cent.
Just a few months back, some banks including nab were offering around 3% rate on a savings account. This was pretty good for those people who do not know where to invest their money and would rather keep it in their saving account.
However, as the economy of many countries s struggling and Australia is no different, it has been hard for banks to give higher interest rates.
So how are Australians saving money during COVID 19?
it is no doubt that for many people either income has reduced or they have suffered financially in some way or another. Those who are not affected are still conscious and more careful with their money.
So the ways of saving and investing have changed a bit for many.
As per this survey by mozo, 34% of income-affected Aussies saving more than before COVID-19.
Out of all those who were surveyed, many are cutting out any unnecessary expenses (72%), followed by seeking some form of government assistance (29%) such as individual support payments or small business assistance.
A quarter (24%) of affected households reported to drafting up a new personal budget. So many are rethinking about their budget and maybe you should too. It is a good idea to put all your expenses and income on a sheet and do your numbers.
Many times, thinking and checking your numbers helps you find the leakages in your savings, you will know where your money is going and which sources are making you more money.
In the same survey, 19% said they had put more money aside to create an emergency fund. Due to COVID, many lost their jobs and many local businesses such as cafe, restaurants or similar are closed. It is easy to feel at risk for all others due to what happened with COVID victims.
Losing your job or business within a short period kind of situation certainly demands an emergency fund.
Further 19% had either switched or shopped around for new service providers (e.g. energy and internet) or financial products (e.g. savings accounts and home loans).
But for many Australians, the safest and easiest option is still saving money in the bank.
Good thing is that there are still some providers who are offering more than 2 per cent rate but you may have to a bit of shopping around. Also, be ready to face some strict conditions if you need this kind of return in current times.
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