Why you might choose to put your savings into an offset account rather than a high interest savings

Big asterix up front – not financial advice, check with your professional financial advisers etc… but… it could make serious sense to put your savings into an offset account (or if your loan is for your own home – directly into the loan) rather than a high interest savings account, and here are a few reasons why.

An offset account saves interest as though it is paid off the attached loan, so it has the same effect as being in the loan itself but it has the advantage of being immediately accessible, which is perfect if you’re the type who likes to have their direct debits all come out of your transaction account and not have to juggle money to ensure there’s a balance in the account to cover it.

High Interest savings vs Offset? Two Red Shoes

The interest saving is essentially equivalent to the interest you’re paying on your loan, so likely 4% plus or thereabouts in current market, which is higher than that offered on even the most serious savings accounts these days.