The next generation of buyers in the property market are gearing up, according to a new report from NAB, and they are exploring strategic ways to “make their money work harder for them”.
Almost two-thirds of younger Australians between 18 and 29 years old have placed their savings in a high-interest account, compared to just half of Australians aged over 30, according to NAB’s data.
Kylie Young, the lender’s personal banking executive, said that while younger Australians overwhelmingly want to buy and invest in property, those who are being priced out of the market or were trying to save larger deposits were seeking more rewarding places to put their hard-earned money.
The survey, which was conducted between 17 February 2023 and 8 March 2023, showed a quarter of younger Australians (25 per cent) want to invest in property — more than any other age group.
“Younger Australians are stepping up to the challenge and taking the opportunity to stash their cash in high-interest savings accounts and grow their money,” Ms Young said.
She particularly noted that those who identify as part of Generation Z or those born between the mid-to-late 1990s and the early 2010s, are driven to secure their financial future, maintain their financial wellbeing, and cope with the increasing cost of living, which is why they are opting to invest their money in high-interest savings accounts.
“High interest savings accounts can be a safe, smart and stable way to manage your money, providing ready access to funds if they’re needed as well as a rewarding interest rate,” she explained.
The executive highlighted that over the last 11 months, interest rates on several high-interest savings and term deposit accounts have increased by around 4.00 per cent, providing Australians with more “rewarding returns”.
Notably, the findings revealed that term deposits are much more popular among older Australians, with 29 per cent of those aged 65 and above surveyed preferring this option. In contrast, only seven per cent of younger Australians aged 18 to 29 favoured term deposits.
“It’s a very competitive market for savers, so now is a great time to shop around and find the best rate and product features that work for you,” Ms Young said.
For people who are currently mortgage holders, the executive raised the option of using an offset account, which she claims can give “easy access to those funds while saving on interest and helping to pay off your mortgage sooner.”
Findings showed that while 22 per cent of Australians think the best thing to do with their savings is offset their mortgage, only 15 per cent of Australians are actually doing so.
The survey also revealed insights into where Australians are stashing their money.
Out of the 2,000 respondents, 55 per cent currently have money in a high-interest savings account.
Meanwhile, more than a quarter or 26 per cent of Australians said they were keeping their savings in cash. Notably, more men (30 per cent ) than women (22 per cent) are holding onto cash but only 10 per cent think it’s the best thing to do with it.