With interest rates lower than ever, it can be hard for you to get a good return on your savings.
Whether you’re looking to invest or simply looking to put your savings away and grow them, beating the low interest rate to get the best returns can be a challenge.
But there are things you can do to get the best possible return and grow your savings.
Here are four things you can do to get a good return on your savings.
1. Choose a high-return savings accounts
Interest rates on savings account are generally low in the current economic climate, but you could have more lucky getting a higher return with online savings accounts which have higher interest rates. David ‘Kochie’ Koch told news.com.au that online savings accounts were good because they were low risk and provide bonus interest. He said all you have to do is abide by the rules on the account to make sure you earn the bonus interest.
2. Shop around for the best deal
Like anything, the best way to make sure you’re getting a good return on your savings is to shop around. There are a range of companies and websites that compare interest rates, savings accounts and term deposits across all the banks and building societies. Why not try a simple Google search to get you started? Don’t always accept the low rate either, negotiate with your bank to get the best possible deal for you.
3. Invest in government bonds
Government bonds are a low-risk way of getting a return on your savings. Basically it involves you loaning money to the government, who is the issuer (the person “borrowing” off you). The issuer pays you interest during the life of the loan and returns the full amount at the end. The beauty of bonds is they are issued over a fixed period at a fixed rate, which allows you to have a guaranteed rate of return and saves you the stress of worrying about cuts to interest rates. ASIC (the Australian Securities and Investments Commission) says the benefits of government bonds include the regular income of quarterly or half-yearly interest payments.
4. Put your money away for longer in a term deposit
If you don’t plan on using your savings for a while, it might pay to put your savings away in a fixed-term deposit. By leaving your money locked away with the bank for a fixed amount of time, you’ll receive a fixed interest rate – which can end up being more over time than if you leave your interest exposed to the elements with a variable rate. Putting your savings in a term deposit also has less risk than other forms of savings accounts, because the interest is not tied to business growth. Another benefit is that you will know exactly what your savings will grow to at the end of the term. But, if you need to access your savings before maturity you’ll be penalised. To avoid that, you can try and put your money in a breakable term deposit – which allows you to withdraw money at any time.