Australian Reserve Bank official says good time to save

16:00, May 19, 2010      

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The Australian Reserve Bank (RBA) assistant governor Malcolm Edey said on Wednesday that now is a great time to get a good interest rate on deposits.

He said competition among banks for deposits has skyrocketed in recent years, partly because of the financial crisis.

Edey noted this has driven interest rates on term deposits and some savings accounts much higher.

"The average interest rates banks have been offering on their term-deposit 'specials' recently have been around 6 percent, or about 100 basis points above the bill rate. A few years ago they were typically about 50 points below the bill rate," he said.

Edey indicated while some of the high deposit rates on offer may not be sustainable in the longer term, it looks as though competition in the deposit market will remain strong.

"Obviously this is good news for depositors. It means that if you have funds to invest and you're prepared to shop around now is a very good time to find a favorable rate," he said.



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