Online savings accounts deliver unexpected bonuses for the savvy saver

The urban myth that technology is shunned by those aged 50 and over met its match when 94 per cent of respondents to a recent YOURLifeChoices survey confirmed they use the internet on a daily basis.  In doing so, they are unlocking the door to an unexpected opportunity for improved savings and income benefits.

The survey also revealed 71 per cent do their banking online. For a demographic, to whom the level of income is often critical, internet banking can be a real winner. An online savings account can deliver up to 10 per cent more in earned interest, points out Roland B Bleyer, founder of the finance comparison site creditworld.com.au.

It is all to do with the new challenging the old – specifically an online savings versus a term deposit account.  Both are absolutely safe if sourced from major finance providers, but one could be a surprise package – offering a greater return on those hard earned savings.  

A quick snapshot will highlight the benefits:  

Term deposits:  A more familiar and trusted traditional form of saving for people over 50, the fixed interest rate offers certainty.  Designed to be untouched until the end of the term, it carries a financial penalty – loss of interest or a fee – if you need to access it earlier.  The interest is calculated for the duration of the term and only paid then. This inflexibility could undermine the initial reason for its choice. (some term deposits pay interest quarterly, every six months or annually, not at the end of the term deposit agreed period)

Online savings accounts:  Have become more prevalent in the last few years.  Lower overheads and a competitive market often mean a higher interest rate is offered to the saver.   Calculated daily and paid monthly, the principle of compound interest is working strongly in your favour.  A potentially even greater friend is the flexibility on offer.  Rates are in constant flux.  Introductory offers can include bonus interest rates for set periods.

Click NEXT to find out more details on how you can benefit from an online savings account.

Mr Bleyer says:  “Term deposits have been a trusted, secure and comforting part of the financial world since the earliest days of trading and commerce.  But today opening an online savings account can be a simple and rewarding act.

“A number of banks are offering online savers greater interest than their term deposit savers.  For example: 5.71 per cent against 5 per cent.  In a year, that can add up to thousands of dollars more.  Maximum flexibility allows access to savings if needed unexpectedly.”

A quick snapshot taken from the creditworld.com.au Bank Accounts section on Wednesday 10 October 2012 reflects the rates difference shown by some of the leading providers in each section.

 

Savings Accounts                                          Term Deposits

Bonus Rate    Base Rate                               Bonus Rate    Base Rate

Provider A      5.71%              5.00%              Provider A                  4.81%              4.71%

Provider B      5.75%              4.95%              Provider B                  4.65%              2.55%

Provider C      5.25%              3.50%              Provider C                  4.85%              4.00%

 

Mr Bleyer adds that online savers will benefit by keeping track of the market offerings.  “Spending 15 minutes a week is all that’s needed.  We are aware that some visitors to creditworld.com.au are savvy enough to set up a new online savings account, take the bonus interest rate that is available for the first four months, and then transfer their savings to another site to take advantage of that new bonus offer.

“Sound too much like hard work?  Not anymore in the world of online banking.  Clearly YOURLifeChoices subscribers are embracing that world in greater numbers. The opportunity is theirs for the taking, for an up to the minute comparison simply visit the creditworld.com.au You can link directly through to the site of the provider if you wish to apply for the offer,” Mr Bleyer adds.

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