How can Bank Cash Interest Rates Benefit Retirees?

Thursday, June 29, 2023

Banks are now offering reasonable interest on your savings. It could pay to shop around. You can have a retirement plan for the investment of your retirement nest egg while keeping some accessible cash aside, at reasonable rates, to have on-hand for your personal needs and other lifestyle plans. Find out how bank cash interest rates can benefit retirees, here.

Over the past 10-15 years banks have offered little joy for investors with money held in cash in terms of interest rate returns.

The Australian Reserve Bank has gradually been increasing interest rates over the past couple of years as we recover from COVID impacts and more recently in an attempt to slow inflation. Rates have systematically been raised from the historic low of 0.10% in November 2020 to, as of 6th June 2023, now being 4.1%.

These rate hikes have gradually been passed on by the Australian Banks to their customers.  You may have heard the media attention being given to the situation for people with home loans and how they now need to deal with increased repayments on their mortgages. 

On the other side of this story, we now have banks offering interest rates of over 4% to customers for their cash holdings. With the slow return to reasonable interest rates being paid by banks for cash deposits you may have missed the fact that there could be improved options on the table for increasing the returns on your retirement cash investments. It could be worth doing your research into bank interest offerings.

Many retirees like to keep some of their retirement money in Cash so they have easy access in times of need. Perhaps a holiday, new car, caravan, home renovations, or overseas travel, or that ‘rainy day’.  Others like the security of money in cash and keep their funds in Term Deposits at a slightly higher cash rate. These have been less attractive over the past few years due to very low returns. For more on Fixed Interest Investment you may like to read our article – Investing in Fixed Interest.

Statistics show that many people have stayed with lower rate interest on their deposits, than is available to them in the broader market. If you are willing to shop around, there could be interest rate offers available that will still give you immediate access to your funds, and possibly better returns on your cash than you are receiving at present.

Maher Digby Financial Advisers can Help Devise a Strategy 

So why not get all your money working for you. Our retirement planning specialists at Maher Digby can strategise a plan for the investment of your retirement nest egg and assist you in working out how much Cash you should set aside for your personal needs and other lifestyle plans. This way you keep maximum funds invested, optimise the maintenance of your capital, and still having money in the bank to live the lifestyle you desire.

As always, we recommend you consult a financial adviser for how to best invest for retirement in order to meet your investment goals.

For more Information contact Mark Digby at Maher Digby Securities Pty Ltd - Financial Advisers – AFSL No. 230559. This document was prepared without taking into account any person’s particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such. Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a financial adviser for bank cash interest rates advice.