How do I know which saving solution is right for me?
There are four main solutions that can be used when saving for a goal, available at many banks and other financial institutions
- Money at call which means you can get money whenever you need it, earns interest (bank pays you for giving them your money)
- Earns a really low base interest, but if you deposit say over $10 regularly like once a month, you
get a bonus amount of interest
- Typically, interest rates for reward savers are slightly higher than online
- You only get the higher interest rate if you deposit regularly and you don’t remove your money
- This account rewards regular savers
- if you have 100k home loan and you have 20k in your offset account, you only pay interest
on the 80k
- Applicable for only certain types of home loans (variable) and can get in some banks
multiple offset accounts.
- Introduces people to investing, you can choose a portfolio based on your level of risk
- Some allow round ups (so if you spend $3.90 on a coffee, it will round it up to $4 and put the 10
cents into the investment account) and also regular deposits into the account can be automated
- These accounts have a level of risk associated with them (i.e. not guaranteed returns)