Westpac is offering more generous interest rates for savers provided they are under 30.
Australians aged between 18 and 29 can get a three per cent per annum interest rate with the new Westpac Life product – a rate triple what other, older customers get.
Alison Banney, the banking and investments editor at financial comparison website Finder, said Westpac Life was great for those under 30 – to a point.
‘If you’re under 30 and have a balance less than $30,000, you’ll struggle to find a better ongoing variable interest rate than the three per cent per annum offered with Westpac Life,’ she told Daily Mail Australia.
‘A maximum bonus rate of three per cent is fantastic in today’s low-rate environment, even though there are a few conditions to meet to get it.’
Westpac is offering more generous interest rates for savers provided they are under 30. Australians aged between 18 and 29 can get a three per cent per annum interest rate with the new Westpac Life product – a rate triple what other, older customers get. Pictured is a stock image
A young person with $20,000 earning three per cent per annum would yield $608 interest even if they deposited just $1 a month, Finder calculated.
New customers are required to open a linked Westpac Choice account to get the three per cent interest rate, on deposits of up to $30,000, and it incurs a $5 monthly account keeping fee.
These fees are waived if a customer is a student, is under 21 or meets the minimum $2,000 a month deposit requirement.
A less generous 2.4 per cent rate will apply for youthful customers who don’t add to their savings.
Ms Banney said Australians over 30 with more than $30,000 in savings stood could get better savings interest rates elsewhere.
The standard Westpac Life accounts offer just one per cent per annum interest, which means someone with $20,000 in the bank would make just $201 a year in interest with monthly $1 deposits.
Alison Banney, the banking and investments editor at financial comparison website Finder, said Westpac Life was great for those under 30 with savings of up to $30,000. Older customers with more money were recommended looking elsewhere
By comparison, HSBC offers 2.1 per cent per annum compared with 1.85 per cent with the Bank of Queensland, and 1.8 per cent for both ING and ME.
Westpac’s special deal for under 30s
A three per cent per annum rate for Westpac Life savings accounts applies for those under 30 with up to $30,000 in the bank
That’s triple the rate for older customers
There’s a $5 a month account keeping fee that’s waived for students, those under 21 and customers who deposit at least $2,000 a month
Financial comparison website Finder said it was the best product for those aged 18 to 29
Older customers with more than $30,000 only get one per cent interest per annum with Westpac Life
HSBC offers 2.1 per cent per annum while Bank of Queensland pays 1.85 per cent interest
The Reserve Bank of Australia cut interest rates to a record low of 0.25 per cent in March, in the same month the World Health Organisation declared a COVID-19 pandemic.
That has given bank customers little reward for saving.
Nonetheless, Westpac’s head of savings and investments Kathryn Carpenter said the COVID-19 pandemic had motivated younger people to save up for a house deposit.
‘It’s clear this has been a turning point for many younger Australians, who are thinking more about owning a space of their own in the future and prioritising saving for a deposit,’ she said.
The coronavirus pandemic has hit the housing market with the value of new home loans plummeting by a record 11.6 per cent in May – the worst monthly decline in Australian Bureau of Statistics records going back to 2002.
Owner-occupier loans plunged by 10.2 per cent and as investor loans plummeted by 15.6 per cent.
First-home buyers who live in their own property made up 37.4 per cent of of home loan commitments in April, a decade high, but this eased to 36.7 per cent in May.
CommSec chief economist Craig James said record-low interest rates would do little to boost the housing market if potential borrowers were worried about losing their job.
‘Interest rates remain super low but the key issue remains the job market,’ he said.
‘When people get greater confidence about their jobs, clearly they will be more likely to build or buy homes.’