Aussies rank high-interest savings accounts as the best money haven

Cryptocurrency crashes, share-market volatility, property price falls, rising interest rates and skyrocketing inflation have turned many investment portfolios on their head, disrupting traditional ideas of safe-haven investments. New research shows that Aussies now rank high-interest savings accounts and superannuation as the top places to store their money for the best returns in the event of interest rates and inflation continuing to rise fast.

What were the options presented to the respondents?

The finding was derived from a survey of an ind’t panel of 1000 Aussies, by Send Money Australia, a global comparison website that helps Aussies living abroad, foreign nationals in Australia and small businesses find the most suitable and cost-effective money transfer service. They survey asked respondents to choose which option presented to them would be the best place to hold their savings & get a return, if rates & inflation continued rising.

  • Investment property
  • Stock market/shares
  • Superannuation
  • High interest savings accounts offered by the banks
  • Managed/index funds
  • Cryptocurrencies
  • Collectibles such as art and antiques
  • Gold, silver and/or other precious metals
  • Overseas investments rather than local investments
  • A stronger overseas currency

How did the respondents rank these options?

High-interest savings account ranked first, with the largest proportion (25%) of respondents choosing this option. The result points to the attraction of liquid financial assets and the probability of many Aussies holding off on investment decisions in the current environment. As interest rates rose this year, several banks are attracting savers with high interest accounts.

These include Macquarie Bank and Rabobank both of which offer a 4% introductory rate, AMP at 3.6%; Ubank at 3.35%; ANZ at 3.25%; and Commonwealth Bank at 3.1%.

Superannuation ranked a close second, with 22% of respondents choosing this option – likely attracted by the 15% tax that this investment vehicle offers. Traditionally perceived as one of the safest and highest-yielding investment in Australia, investment property was chosen by just 18% of respondents as the best place to put their money.

A stark fall from the 2020-21 property boom, this year has seen house prices fall at the fastest rate since the 2008 global financial crisis, due to increased interest rates. In particular, Sept property values fell by 1.8% in Sydney, 1.7% in Brisbane & 1.1% in Melbourne.

With more time to see an unstable property market recover, a higher proportion (31%) of respondents (18-34 yrs) were confident that putting money into investment property would provide the best return. This compares with 19% of 35-54-year, & 13% of over-55s.

How is the ASX faring?

The Australian share market has experienced periods of extreme volatility in the last two years, with total returns falling by 7.5% in FY2022, after rising 30.2% in FY21. As such, only 11% of respondents believe shares are the best place to put their money.

International markets saw even bigger losses in FY22, including 10.8% for the Dow Jones and 24% for the Nasdaq, lowering confidence in international investments as a safe haven. Just 1.6% of survey respondents chose international investment as the best place for their money.

A small minority of respondents (7%) believe gold, silver and other precious metals provide the best return on investment. Historically, gold has seen fractional growth in value in comparison to property and shares, even though it has a long-term record of stability.

Cryptocurrency upheld its reputation for high-risk precariousness in 2022, losing approximately $1trn in value across May & June 2022, but this same period saw popular coins such as Luna fall from $116 to $0, wiping out about $60 billion from the crypto mkt.

Australians are yet to forget this tumultuous period: just 3% of the survey respondents believe cryptocurrencies are the best investment. Despite cryptocurrencies’ popularity among the younger Australians, the lack of trust in this investment was consistently evident across all age groups, chosen by just 2% of 18-34-year-olds, 4% of 35-55-year-olds and 0% of over-55s.