A funeral savings account, as the name suggests, is an account in which money you deposit is held and saved specifically for funerals and funeral products.
You may ask yourself, how is this any different to putting money into a regular savings account with a bank? The answer is simple, it is more beneficial to you, the customer.
Consider if you were to deposit, for example, $5,000 into a regular savings account and hold it there for 10 years.
Right now, the highest possible interest rate available on a savings account is just 3% per annum, and the highest possible interest rate on a term deposit account is just 4.3% per annum with a limit of 5 years. For comparison, our Funeral Savings Fund offers a set interest rate of 5% per annum.
The table below compares how your money would end up in each of these options within 10 years.
Product | Interest Rate | Deposit | Total Interest | Final Balance |
Savings Account with Bank | 3% | $5,000 | $1,720 | $6,720 |
Term Deposit* | 4.3% | $5,000 | $2,618 | $7,618 |
Fair Wealth Australia Funeral Savings Account | 5% | $5,000 | $3,144 | $8,144 |
* Table assumes reinvestment of total balance for further 5 years after initial maturity
As you can see, the Fair Wealth Australia account has the highest potential to grow your money. Not only this, but it does not come with the temptation pitfall of a regular savings account where money can be removed at any time.
Furthermore, this comparison considers the current highest rates available for term deposit and savings account options, where the real rate you receive may be considerably lower.
Unlike the savings options offered by banks, our interest rate is not affected by changes to the cash rate, and we remain dedicated to ensuring our customers continue to receive their competitive 5% per year.
In addition, the above comparison has only considered the compounded interest on a once-off deposit, and you can maximise your money even further by depositing a set amount weekly, fortnightly, monthly, or even quarterly and yearly.
When it comes to a funeral, we all want to know our families are looked after. So consider your options, and give us a call today!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.