Canstar releases Bank of the Year - Savings Award

Smart savers are cleaning up

Canstar releases Bank of the Year - Savings Award

When it comes to saving, the good news is that we are. New Zealand households have been spending less than they earn (in other words, saving) for several years now. Those savings need to be invested, so each year CANSTAR analyses the term deposit and at-call savings accounts on offer by New Zealand’s financial institutions; we have researched what is on offer from seven institutions, assessing not just the interest rates available over the period of analysis but also the fees and other features in order to announce the CANSTAR Bank of the Year – Savings Award.

When it comes to savings…

The recent cut in official cash rate, to 3.25%, no doubt pleased borrowers but was less welcome for savers. It might hearten savers to know, though, that despite the recent cut they are still receiving significantly better returns on their savings than they were five years ago – particularly when inflation is taken into account.

“Back in July 2010 the official cash rate was three percent, just twenty-five basis points lower than its current level,” said CANSTAR General Manager – New Zealand, Jose George. “Savers are currently receiving a far greater real return on their money though, thanks to our very low inflation level. And after all, it is the purchasing power of money that matters.”

CANSTAR advises that smart savers that shop around for a good online savings rate can now end up with a healthy 1.40% more in their pocket, after inflation, than they could in 2010.

The real rate of return on term deposits is more of a mixed bag. While those chasing the maximum rate of return are still better off currently for timeframes up to and including three years, the rate of difference reduces as the investment term is lengthened.

“Back in 2010 the expectation of financial institutions seemed to be for a rapidly improving economy, hence investors could lock in a rate of around seven percent over the five year period,” said Mr George. “Currently the maximum interest rate on our database over a five year term is 5.30 percent; a little more subdued.”

Who is the winner?

The CANSTAR Bank of the Year - Savings Award is presented to the institution that consistently offers high value across the variety of savings accounts assessed. This year, CANSTAR is pleased to announce Westpac as winner of the Bank of the Year - Savings Award.

“Westpac has a strong range of savings products across all product areas we assess and performs well across the board,” said Mr George.

“In addition to the quality of its products, Westpac's online banking is exceptional. Westpac has been working hard to take its online banking experience to a new level and its launch of the bank’s new internet and mobile banking platform, Westpac One, earlier this year means that Westpac customers are provided the same experience on whatever device they choose to use - desktop, tablet, smartphone. It really is full banking functionality - 120 plus services – on its integrated platform.”

Responding to the award Jo McGregor, Director Deposits, Westpac New Zealand Strategy Products & Marketing, said the New Zealand market has seen continued growth in personal deposits at a rate of around 10% each year, reflecting a new preference for saving over spending.

“Westpac has also seen more customers select online savings options as customers choose online channels for their transactions,” she said.

“This is supported by an increase in savings among young people. Recent Westpac research showed security and financial stability were important to this group, as well as access to digital, online and mobile apps.”

To read CANSTAR’s detailed reports, visit www.canstar.co.nz

ENDS

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