Lost bank accounts earn decent interest but that’s not a practical solution to the yield challenge
The interest rate earned on “lost” bank accounts for the 2017-18 period was 2.13%. The average interest rate on a transaction account over the same period, according Canstar data, was a measly 0.11%. For an online saver it was 1.19%.
Surprised? I certainly was. And to top it off no tax is payable on interest earned on a lost bank account.
Maybe this is why there is over $650 million sitting in lost bank accounts. Clearly it pays to lose sight of your money!
A bank account is considered lost if it hasn’t been used in seven years and contains a balance of $500 or more. All unclaimed money received by ASIC is transferred to the Commonwealth of Australia Consolidated Revenue Fund.
Since July 2013 all lost money has earned interest. The rate is based on the percentage change in CPI. Before 2013 no interest was applicable.
So what does this all mean dollar wise? Click to read more https://moneymag.com.au/lost-bank-accounts-interest/