What record low rates mean for savers
The news of the Reserve Bank cutting the official cash rate to a level never seen before in New Zealand (2.25 per cent), could mark good news for home loan holders. But as those with a mortgage could find savings, what does it mean for those currently saving to buy a property and self-funded retirees?
The reality is, when interest rates on home loans are lowered, it often means that interest rates on savings accounts are cut too. This means, New Zealanders are earning less and less in interest on the money they have in the bank
For Kiwis searching for a better all-round savings option, it’s important to look at more than simply the most competitive interest rate out there. Check out how the interest is paid - the more frequently it’s calculated the better. For example: a daily calculation is better than weekly, monthly or quarterly. Also be sure to check all of the fees and benefits on offer.