Australians have high confidence but low knowledge when it comes to basic financial literacy, according to a survey.
ME’s survey of 1,500 Australians found 13 per cent rated their banking knowledge as “below average” but 60 per cent failed a basic banking literacy quiz.
ME head of deposits and transactional banking, Nic Emery, said this suggested that many banking customers may be making poor banking decisions.
"Some Aussies fail to educate themselves because they find banking dull and complex and think they know best, while others find working with numbers difficult and put their head in the sand,” Emery said.
“But like it or not, banking is part of our daily lives and understanding the basics is a life-skill, like being able to cook and catch public transport."
The survey found that 35 per cent had done nothing to educate themselves on banking products and services.
“My advice is to get informed. There are plenty of educational options like the Government’s MoneySmart website to ME’s engaging online school of money, ed. Alternatively, go see a completely independent adviser like an accountant or enrol in a course,” he said.
The survey found that 74 per cent did not know what a comparison rate was, 74 per cent did not know putting a car purchase on a lengthy home loan may cost more than a separate personal loan, and 43 per cent did not understand compounding interest and the benefit of being patient with savings.