Consumer watchdog Choice has made a public appeal to Australians to look at the interest being paid on their day-to-day accounts.

According to a Choice investigation Australians are still in love with the idea of having cash on hand. In turn they have left large sums of money in easy-access, but low interest accounts. And this is giving the banks money, from interest, which should rightfully be going to the consumer.

tom Godfrey. Image:

tom Godfrey. Image:

“Consumers are missing out on hundreds of dollars a year,” said Tom Godfrey from Choice, “by leaving money in transaction accounts.

“Some of the big banks say they pay an interest rate but they offer just 0.01 per cent which is clearly not doing anyone any favours.”

Mr Godfrey pointed to the different rates attributed to different accounts. While interest rates are historically low, not all account rates are as low as each other.

“To get around the low interest rate,” said Mr Godfrey, “you can link your money to a high-interest account and you can also use a home loan offset account if you have one.”

Term deposits may offer higher returns, but the paltry rate isn’t worth the lack of access to your own funds.

Mortgage offset accounts appear to be the best of a bad bunch. These are transaction accounts linked to home loans. Withdrawals against this account are offset against the loan balance. The average home loan rate is currently 5.15 per cent.

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