How savers can fight back against inflation
Savers are earning far less on their deposits than inflation is costing them, according to new figures. Despite rising balances in savings accounts and term deposits, the average interest rates remain well below the current inflation rate of 3%. Financial experts warn that keeping too much cash in the bank could mean losing money in real terms.
Data from November 2025 shows that bonus-paying savings accounts offered an average rate of just 1.82%. Other standard savings accounts paid even less—closer to 1%. Meanwhile, inflation has stayed at 3%, meaning most savers are seeing their money lose value after tax and rising prices.
Term deposit balances grew slightly from $227.4 billion to $228.6 billion over the past year. Savings account holdings also increased, rising from $110.7 billion to $118.4 billion. Yet these gains do little to offset the erosion of purchasing power caused by inflation. Dean Anderson, founder of Kernel Wealth, pointed out that real returns on cash have often been negative once inflation and tax are taken into account. He recommended shifting some savings into other income-generating or growth-focused investments for better long-term results. Liz Koh, founder of Enrich Retirement, agreed, suggesting that bank deposits should be kept to a minimum. Instead, she advised spreading funds across assets like real estate, infrastructure, inflation-protected bonds, dividend stocks, and commodities. David Cunningham, chief executive at Squirrel, added that many people may not even realise how little they’re earning. He noted that interest rates are often buried in online banking interfaces, making it harder for customers to see the true impact on their savings.
With inflation at 3% and savings rates stuck below 2%, the gap between earnings and rising costs is widening. Experts urge savers to review their options and consider moving money into investments that can keep pace with—or outperform—inflation. Without action, cash held in traditional accounts risks losing value over time.
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