Photo: RNZ
Savers who keep their money in big bank accounts may be missing out on potential interest.
A survey of interest rates offered by the banks for their basic, on-call savings accounts showed most were paying between 1.45 percent and 1.65 percent.
This does not include the additional interest that is available in some cases to people who save a certain amount per month - ANZ offers 3.25 percent if people deposit $20 a month and make no other withdrawals.
BNZ's Rapid Save is the exception and is the best of the big banks, offering 3.75 percent and one free withdrawal a month.
Reserve Bank data shows the average rate being paid for unconditional savings accounts from the banks fell to 2.3 percent in December from a peak of more than 3 percent. Including bonus interest, the rate had fallen to 3.4 percent from a peak of just over 4.6 percent.
Sharesies offers 3.35 percent, Kernel 3.8 percent, and Squirrel 4 percent. Heartland's digital saver offers 4 percent. Fund manager Booster also offers a savings account with returns that can change month on month but are currently 4.25 percent.
'A lot of people in bonus accounts don't get bonus'
Squirrel chief executive David Cunningham said when he worked in the banks, only about 50 percent of people would qualify for bonus savings interest, although that could be 70 percent of accounts by dollar value.
"A lot of people in bonus accounts don't get the bonus.
"Where banks make a lot of their money is when interest rates are a bit higher, like they are now, the margin between what they're lending at and borrowing at is massive."
He said people could often access better rates by looking outside the banks.
Most of the fintechs invested the money with a mainstream bank, he said. "With Squirrel - each one is slightly different - it's held on trust so you're effectively investing with a major bank and getting a much better interest rate."
He said people would also be covered by the depositor compensation scheme when it took effect, protecting up to $100,000 per saver in each licensed deposit taker.
Massey University banking expert Claire Matthews said people should take care with all savings accounts, and ensure they understood how non-bank options worked.
"I think they do need to do a bit of homework to ensure they understand how the accounts operate, because it is different to a savings account with a bank, and people need to understand that ultimately the savings are deposited with a bank albeit not in the individuals' own names."
The NZ Banking Association said it could not comment on pricing.
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