Competitive Interest Rates

High Interest Rates with Online Banking Services

Looking for competitive interest rates? You're not alone. Many New Zealanders are on the hunt for the highest interest rates for their savings. Online banking services can offer some of the most competitive interest rates in New Zealand - read on to find out how.

• Banking
• Investment

New Zealanders are luckier than many of our Western counterparts to be less affected by economic downturns than other countries - particularly due to our absence of a financial capital in the nature of London or New York. However, the impact of the worldwide credit situation does flow down to Kiwis, and we are beginning to see many of the effects of tight economic times come to fruition in our corner of the earth as well.

On the plus side, with the dramatic lowering of the official cash rate, mortgage rates are being significantly reduced, making house ownership much more affordable. This is great for every Kiwi with a mortgage, and will help out many New Zealanders in otherwise rickety economic times.

The negative of the official cash rate cuts flows through to New Zealanders with savings. Kiwis with money in the bank who, throughout past years, have enjoyed interest rates nearing 10%, are now seeing the income from their savings decrease.

Interest rates have dropped, and will continue to drop with any future cuts to the official cash rate. This means that your savings is now earning you less in interest, meaning less money in your pocket. In a time when you may need to delve into your hard-earned reserves, this unfortunate outcome is leading many of us to rethink what we are doing with our savings, and where is the best place for them.

At the end of the day, in any economic environment, the best place for your savings is the bank.  Moreover, you can still make money from your savings; having money in the bank earning interest is and will always be the safest kind of investment.

The question on every saver's mind here is, how to I find a bank which can offer me the most competitive interest rates on my savings? With the major banks' interest rates dropping like flies, it might not surprise you that the leading high interest rates are actually from third party financiers. Going to one of these companies means you don't even have to change banks to get a competitive interest rate. It's a good idea to look around to find the best deal for you, but understanding why a third party can offer you the best rates is simple: lower overheads.

Consider saving your money with an online banking services provider, who does not have physical branches. No branches means no tellers, no building rent, no unnecessary extras. Instead of contributing to the upkeep and large overheads of running with a big corporate branch with your interest rate earnings, you get to keep more of it yourself when you use an online service.

You can compare savings accounts rates to find a high interest rates provider online, with graphs which are updated each day. Because online banking services aren't part of an expensive branch network, they don't need to store away parts of your savings' interest for their running costs. This simply means the most competitive rates for you as the saver.

You earn interest daily and are paid out after close of business at the end of every month. To access your savings and interest, you can simply transfer funds online to a nominated account, just like you would with any standard banking website.

Remember than unless you hold an exemption certificate, Resident Witholding Tax will be deduced when interest is paid to you. A legal requirement, this is a government tax and is obligatory for all savings accounts, and the necessary amounts do not go to the savings account provider in any way.

Looking for more information on savings and banking in New Zealand? Check out the NZS.com directory.

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Business images from Flickr: Five Dollars, New Zealand Flag and Wellington Buildings.