While many Australians with mortgages are benefiting from recent interest rate cuts by the Reserve Bank, savers are facing challenges. The rates offered on savings accounts have also decreased, leaving those who rely on interest income feeling the pinch.

According to the latest statistics from APRA, Australians have a record $1.64 trillion saved in banks, an increase of $35 billion just in July. However, the declining interest rates are making it harder for savers to grow their funds.

Stuart De Poi and his wife, Rianna, are saving for their first home. "Every pay cycle, it seems like our pay goes less and less far," Stuart said. The couple has been saving for two years and plans to receive financial assistance from family. Without this support, they estimate it could take them a decade or more to save enough for a deposit, especially if interest rates continue to fall.

The Reserve Bank began cutting interest rates in February, with subsequent reductions in May and August. Stuart noted that their interest rate dropped from 5.5 percent to 4.8 percent.

Sally Tindall, data insights director at Canstar, highlighted that while many lenders previously offered savings rates around 5.5 percent, only one does now. "But there are plenty of catches that come with this account," she said, pointing out that customers must meet specific monthly terms and conditions and be between 18 to 29 years old to qualify.

The range of savings rates varies widely, from 0 percent to 5 percent. Tindall stated that a competitive rate today would be 4.5 percent or higher, but most accounts require meeting monthly conditions to maintain that rate.

A report from the Australian Competition and Consumer Commission revealed that 71 percent of accounts did not earn bonus interest in any given month during the first half of 2023. Wealth advisor Sulo Kulendran from BDO Australia emphasized the importance of selecting a savings account that fits individual needs. "It's really about going out there and seeing what's out in the market," she said.

Term deposits are another option for savers, but they come with limitations. Kulendran noted that while they used to offer higher rates, that is no longer the case. "The downside is you've got your money locked away," she added.

Cameron, who has significant savings, has been using the interest to supplement his income. However, he has seen his interest rate drop to about 4 percent. After shopping around for better rates, he found the eligibility requirements confusing. "When I looked at the various criteria that you had to have to be eligible for it actually got quite confusing," he said, mentioning stipulations like having a salary deposited into the account and making a minimum number of payments.

As savers navigate this challenging landscape, many are left searching for the best options to maximize their savings.