Kiwi savers, are you getting the best return on your hard-earned cash? Financial experts are sounding the alarm, warning that loyalty to your existing bank or savings provider simply doesn't pay – especially after the Reserve Bank of New Zealand (RBNZ) held the base rate steady.

Following Thursday's decision to keep the base rate at 4.25 per cent, many savers are feeling the pinch. Average savings rates have been trending downwards in recent weeks, leaving many with frustratingly low returns. It’s a stark reminder that in today’s financial landscape, you need to be proactive and shop around.

Why Loyalty Doesn't Pay

For years, many New Zealanders have stuck with the same bank out of habit or convenience. However, this loyalty often comes at a cost. Banks are not obligated to automatically pass on base rate changes to all their savings products, and many are prioritizing their own profits. While some providers have responded to market pressures, many haven't, leaving loyal customers with significantly lower returns than they could be getting elsewhere.

What's Happening with Savings Rates?

The downward trend in average savings rates is concerning. While there's been a slight glimmer of hope with some providers launching new, more competitive products this week, the overall picture remains challenging. It's crucial to understand that these new products often come with specific conditions – such as minimum deposit amounts or shorter fixed terms – so read the fine print carefully.

Expert Advice: Take Action Now!

Financial experts are urging savers to take immediate action. Here’s what you should do:

• Compare Rates: Use online comparison tools to see what other banks and credit unions are offering. Don't just look at headline rates; consider the total return, including any bonuses or fees. Websites like Canstar, RateCity and Good Returns can be incredibly helpful.
• Consider Fixed-Term Deposits: Fixed-term deposits often offer higher interest rates than standard savings accounts, especially in the current environment. However, be mindful of the term length and any potential penalties for early withdrawal.
• Explore Credit Unions: Credit unions are often more focused on providing competitive rates to their members. They're worth considering as an alternative to the larger banks.
• Negotiate with Your Current Bank: Don't be afraid to contact your current bank and ask for a better rate. Highlight the fact that you’re considering switching to a competitor. Sometimes, a little negotiation can go a long way.

The Bottom Line

In the current economic climate, it’s more important than ever to be an active and informed saver. Don't let loyalty cost you money. Take the time to compare rates, explore your options, and ensure you’re getting the best possible return on your savings. The RBNZ base rate hold presents a perfect opportunity to reassess your savings strategy and make changes that benefit your financial future. Don’t wait – start shopping around today!