Not All Deposit Accounts Are Equal

Kiwis Squirrel Savings Away – But Not All Deposit Accounts Are Equal

CANSTAR Savings and Transaction Account Star Ratings Report Released Today

Kiwi savers are squirreling money away diligently, with the value of our collective bank deposits growing by 20 per cent over the past two years to reach $140 billion*. This is a fantastic achievement, considering the lack-lustre interest rates on offer in a post GFC-world.

Not all deposit accounts are equal, says CANSTAR Research Manager, Mitchell Watson.

“In the current low interest rate environment finding the best deposit account for your needs is well worth the effort. The challenge is to both maximise and minimise; earn the highest interest rate possible while paying the lowest fees.

“New Zealand banks offer a range of options to for different savings purpose including deposit accounts for everyday transactions where money goes in and out like a revolving door as well as long-term savings accounts, and everything in between,” said CANSTAR Research Manager, Mitchell Watson.

To take the hard work out of the exercise, and make it easier for consumers to compare, CANSTAR has researched New Zealand deposit accounts, examining 80 accounts offered by 12 institutions, covering three product types; personal transaction accounts, savings and investment accounts and high yield accounts across five broad customer profiles: flexible saver, regular saver, full access saver, high transactor and low transactor. The findings are published in its NZ Savings and Transaction Account Star Ratings Report, available at www.canstar.co.nz

It pays to shop around

Mr Watson says that whatever your customer profile and pattern of use, it is worth checking that your account is up to scratch.

“You may or may not be shopping around at the moment but this is as good a time as any to review where your money is, what you do with it, what you are earning and what you are paying. The last thing you want is fees nibbling away at the edges of your earnings.

“It pays to be aware of the fees commonly charged on deposit accounts. These include monthly account keeping fees, branch cash deposit or withdrawal fees, ATM withdrawal fees, Internet BPAY fees and EFTPOS transaction fee.”

Average rates as at 01/06/2015

Source: Canstar Savings and Everyday Transaction Accounts star ratings. Note: Only 6 out of 23 transaction accounts offer an interest rate at a $2,000 balance.

“Retail deposit interest rates vary greatly as well. Consumers should make it their business to see how hard their money is working for them; if you are stuck in an online account that pays 2.40% interest, your base of $25,000 is not going to get much bigger anytime soon.”

Who offers outstanding value?

Kiwis are well-served when it comes to good-value transaction and savings accounts.

CANSTAR has identified:

• 3 accounts that offer outstanding value for High Transactors (ANZ Freedom, BNZ YouMoney, Kiwibank Now Account Flat Fee)

• 3 accounts that offer outstanding value for Low Transactors (ANZ Freedom, ASB Streamline, BNZ SmartMoney)

• 2 accounts that offer outstanding value for Flexible Savers (Heartland Bank Saver, NZCU Baywide Online Saver)

• 2 accounts that offer outstanding value for Full Access Savers (Heartland Bank Saver, TSB Premier Cheque Account)

• 4 accounts that offer outstanding value for Regular Savers (ASB Savings Plus, Heartland Bank Saver, NZCU Baywide Online Saver, RaboDirect NZ PremiumSaver)

To read CANSTAR’s detailed report, including customer profile definition and methodology visit www.canstar.co.nz

*RBNZ, March 2015

ENDS

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