How does the rising cost of living affect Aussies' banking behaviour?
Well, according to Finder's new research, trust in traditional banks is growing with more Aussies saying they bank with the big four.
Finder’s Consumer Sentiment Tracker shows a staggering 4 in 5 Australians (80%) – 16.2 million people – bank with one of the big four banks – the highest number on record since Finder began tracking this question in 2019.
The data shows that this proportion has been trending upwards since January 2022 when just 71% of people said they banked with the big four – an additional 1.8 million customers Australia’s largest banks have attracted in less than 2 years.
More individuals are gravitating to the big banks as the cost of living rises
Graham Cooke, head of consumer research at Finder said:
“Consumers are prioritising their financial security as they grapple with interest rate rises and rising living costs.
In uncertain times, the big banks can feel like the safest option for consumers to stash their savings.”
He also said consumers are being more conservative with the way they manage their money:
“The big banks may provide peace of mind for those looking for stability, but it’s worth remembering that all deposits up to $250k in Australian institutions are protected by the Government Guarantee.
While the big lenders may instil a great deal of trust due to their long standing history, some of the smaller banks are offering better deals.”
Aussies are missing out on great savings
In a separate research, Finder found that 2 in 3 Australians (65%) – equivalent to 11 million people – are completely oblivious of the interest rate they are earning on their primary savings account.
Data shows that for those who do know what rate they are getting, the average they are earning is 3.9% p.a.
The survey also found savvy Gen Y earn the best savings interest rate of 4.2% on average, compared to baby boomers (3.7%).
| What rate are you getting on your primary savings account? | |
| Baby boomers | 3.7% |
| Gen X | 3.9% |
| Gen Y (millennials) | 4.2% |
| Gen Z | 3.9% |
| Source: Finder survey of 327 Australians who know their savings rate, July 2023 | |
Cooke urged Aussies to do an audit of their savings products:
“The big banks have lifted many of their ongoing products but mid-level and smaller lenders continue to offer the highest ongoing rates on the market.
Look for a leading, ongoing rate and make sure you will meet the conditions to earn your bonus interest.
With lenders paying as much as 5.65% p.a. currently – you can bolster your savings faster if you are diligent.”
