More than half of all New Zealand adults are missing out on higher interest rates by not taking advantage of bonus saver products.
A survey we recently carried out showed that 56% of New Zealanders have never had a bonus saver account, which typically pays higher interest rates than a standard on call account. Reasons being they either haven’t heard of them, don’t understand them or the conditions don’t work for them.
Of the 19% who have used them before but not anymore, the majority either needed access to that money, their situations had changed or they wanted a better deal.
The 25% who do use bonus saver products like the high interest rate and find it suits their savings habits.
The Reserve Bank website also shows that more than 29 billion dollars sits in transaction accounts each month, typically earning no or low interest. From past research we know half of New Zealanders leave more money in their transaction accounts each month than is necessary to cover their expenses.
When you add all this up, it equals millions of dollars of interest being missed out on in New Zealand, every month.
In times when maximising every dollar is so important, there are simple ways Kiwis can make their money work harder.
‘Complacent transactors’ who leave more money in their transaction account each month than necessary, can maximise returns by putting the surplus into a straight forward bonus product that will pay higher interest rates
‘Passive savers’ whose money keeps rolling over in the same account, should regularly check the market to make sure they are getting the best rate possible for their hard earned savings