Ask an expert - progress savers or high interest online accounts?
If you’re looking to maximise your savings, why not try an online saver account?
QUESTION
Basil, 73, from Victoria, asks:
Is it best to leave money in standard type accounts, such as progress savers, or go to so-called high interest online accounts? If the latter, how do we go about it?
Joshua Stega, director of Sydney-based boutique wealth management firm Jas Wealth, replies:
Hi Basil,
Good question. In theory, progress savers are a great idea, however in reality, we find most people are not disciplined enough to use them effectively.
In our experience we have far more success with getting clients to save when we use online saver accounts for two reasons:
1. It is a separate account, which helps you psychologically divide your money into a spending account and a savings account;
2. It takes a day to transfer money back to your linked transaction account, which reduces impulse spending decisions.
We recommend you consider online saver accounts such as those offered by UBank, ING Direct and Rabobank. To go about opening a high interest online account, you will need to apply on the bank’s website. You’ll need to complete a range of details as proof of your identity. If you have any questions about how to complete your application, give the bank you’d like to open an account with a call to help you through the process.