As interest rates continue to rise, some Australians are looking to build up their savings in case of a recession. However, financial experts are warning that savers should not get too excited about the current high rates, as they could soon come down.
According to a recent report by Deloitte, interest rates on some Australian savings accounts could soon surpass six percent. However, the report also warns that these rates will likely be temporary, as the Reserve Bank of Australia (RBA) is expected to start cutting rates again in the coming months.
“Some households that still have spare capacity in their budgets are opting to squirrel that money away to boost their war chest in case of recession,” said Deloitte’s chief economist, Kate Tindall. “However, it’s important to remember that these high-interest rates are not sustainable in the long term.”
Tindall said that savings rates “could very well break the 6 per cent barrier” if many economic forecasts are believed. However, she warned that consumers should not be tempted to switch savings accounts just for a higher interest rate.
“It’s important to compare the overall package of features offered by different savings accounts,” she said. “For example, some accounts may offer a higher interest rate, but they may also have high fees or other restrictions.”
Tindall also advised consumers to be wary of any savings accounts that offer rates that seem too good to be true. “If an offer sounds too good to be true, it probably is,” she said. “There are a lot of scams out there, so it’s important to do your research before you open any new savings account.”
With the RBA expected to start cutting rates again in the coming months, likely, savings rates will also start to come down. However, for now, those who are looking to build up their savings may be able to take advantage of the current high rates. However, it is essential to remember that these rates are not sustainable in the long term, and consumers should not be tempted to switch savings accounts just for the sake of a higher interest rate.
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