Despite the steep fall in interest rates on savings accounts this year, more people are putting their savings in transaction and savings accounts, according to new research.

Canstar’s 2020 Consumer Pulse Report shows that 79 per cent of Australians save a portion of their after-tax income each month.

Close to half (47 per cent) keep their savings in a savings account, where they would have suffered an average rate cut of 58 basis points this year. The proportion of people using savings accounts has increased from 38 per cent last year.

Fourteen per cent keep their savings in a transaction account, where many would get no interest. That number is up from 9 per cent last year.

The increase in the use of bank accounts reflects a change in savings goals. Traditionally, the number one savings goal has been a holiday.

But this year the number one priority is future living expenses. Savers want to have their money readily available to cover unexpected costs.

“Australians are saving to get by and are currently in survival mode,” the report said.

The proportion using term deposits has increased from 4 per cent to 9 per cent.

The Canstar survey found that the proportion of people using a mortgage offset account for savings has fallen from 21 per cent last year to 7 per cent now. And the proportion making extra home loan repayments has fallen from 14 per cent to 4 per cent.

The use of salary sacrifice into superannuation as a savings strategy increased slightly from 3 per cent to 4 per cent. Investment in shares, exchange traded funds and other investment products increased from 4 per cent to 5 per cent.