Big bank offers unbeatable interest rate
Westpac will offer lucrative savings rates to young Australians wanting to save more money to buy their first home.
From July 8, the country's second largest bank will offer an ongoing variable savings rate of 3 per cent to people under the age of 30 - a deal that's 1.25 per cent better than anything else on the market.
Westpac Life account holders under the age threshold will be able to access the premium rate if their monthly balance increases and they make five debit transactions from a linked Westpac spending account.
A minimum rate of 2.4 per cent will be offered if the account conditions are not met.
The advertised spend and save rate applies to all balances of up to $30,000.
Westpac's efforts to lure young savers through high deposit rates comes amid major financial incumbents slashing rates on savings products to less than 1 per cent.
The COVID-19 economic downturn has created the low interest rate environment, with the Reserve Bank slashing the official cash rate to 0.25 per cent in March.
Westpac head of savings Kathryn Carpenter said the impacts of the coronavirus pandemic had prompted more Australians to reassess their financial priorities.
"Building savings can already be challenging for young adults who are only just starting their financial journey, particularly in an environment like this where many are also now navigating changes to their income or employment," Ms Carpenter said.
Research conducted by Westpac shows 49 per cent of young people aged 18 to 29 planned to save more of their income since the beginning of the pandemic.
It also noted that 85 per cent of respondents have decided to cut back regular spending habits.
"While this has been a difficult time, it's encouraging to see Australians are embracing this as an opportunity to get on top of their finances and make some positive changes," Ms Carpenter said.
"It's clear this has been a turning point for many younger Australians, who are thinking more about owning a space of their own in the future and prioritising saving for a deposit."
According to RateCity, Bank of Queensland, Up and digital-only bank 86 400 all offer the highest ongoing savings rate - 1.85 per cent - available to any age demographic.
RateCity research director Sally Tindall said if Westpac's rate could withstand the economic pressures, it could result in a significant inflow of new customers.
"It's remarkable to see a big four bank boost savings rates for young Australians at a time when most banks are slashing them," Ms Tindall said.
"This high interest savings account could give their savings goals the boost they need, provided they can keep up with the terms and conditions."
Originally published as Big bank offers unbeatable interest rate