The floods in Queensland are one reason for RBA’s decision, it has revealed.

The Reserve Bank of Australia (RBA) has opted to maintain the interest rate at 4.75 per cent for February.

This news should be welcomed by homeowners across Australia and particularly those experiencing difficulty due to the floods in Queensland and parts of Victoria.

And the natural disaster played a part in the minds of the RBA, who stated the “temporary adverse effect” of the issue, along with low inflation, were two reasons why the organisation opted to maintain the cash level.

What’s more, this comes after the RBA chose to keep rates the same over the Christmas period and for the whole of December.

However, the last cash level rise came in November when the rate increased by 0.25 per cent from 4.5 per cent to 4.75 per cent, which lead the Commonwealth Bank to up the levels on its home loan and savings accounts, much to the dismay of homeowners in the country.

Talking about the floods in Australia, RBA governor Glenn Stevens said in a statement this week (February 1st): “Over the next year or two, the efforts to repair or replace infrastructure and housing will add modestly to aggregate demand, compared with what would otherwise likely have occurred.

“The extent of this net additional effect will depend on the full extent of the damage, the speed of the rebuilding and the extent to which other public and private spending is deferred.”

In addition to this, he pointed out it was important for the bank to assess whether the demand from rebuilding after the natural disaster will have a big impact on the medium-term outlook for inflation.

Earlier in the statement, Mr Stevens revealed the RBA expects inflation throughout the year ahead to be between the two to three per cent target, also stating a further increase in employment growth is likely over the coming year.

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An expert has said that interest rates will not distract people from saving.

People looking to take out savings accounts such as ISAs or fixed rate bonds in the near future will not be put off by the current level of interest rates in the UK.

That is according to Jason Riddle, co-founder of Save Our Savers, who has said that anyone dependent on the income provided by the cash they had previously put away for the future “may be forced to spend their capital” or may feel that it is not worth preserving because of the fact that it is being “devalued” by the rate of inflation.

Official data from the Office for National Statistics last month revealed that the government’s target measure of inflation – the consumer prices index – remained at 3.1 per cent in September.

And Mr Riddle added that until this figure changes, savers’ cash will not be valuable to banks.

“The policy is making those who would be better off maintaining their savings in the long-term spend it,” he concluded.

Meanwhile, one expert has said that people must be willing to consider their retirement savings.

People should think carefully about the type of savings account they want to use to fund their lifestyle following retirement, an expert has said.

It was suggested recently by Jason Butler, a partner at Bloomsbury Financial Planning, that savers are becoming increasingly less likely to use options such as fixed rate bonds or ISAs to store money for their future.

However, Yvonne Goodwin, managing director of Yvonne Goodwin Wealth Management, has said that consumers must consider all the avenues open to them following the global economic downturn – and could even set out a formal plan for how they are going to spend their income.

“Lots of people do a business plan for the business, but they don’t think to do the same for their own personal finances,” she observed.

Ms Goodwin concluded that examination of a fiscal situation is advisable, as this will allow for both a “frittering away fund” for the present and savings for the future.

High interest savings accounts can be an important investment vehicle that can help you grow your nest egg and work your way to a healthy retirement. Although savings accounts often too good to be true, the reality is that many of them are really not even worth it. If you look at normal savings accounts with a nominal interest rate of 3.5 to 5% it might sound okay, but when you look at all the fees, interest and inflation yo might actually be losing money.

Saving money is important and saving it at the maximum interest rate is really important – especially over long periods of time. Even 0.5% can make a huge difference over a 30 year period. Choosing the right savings account requires a bit more research and making sure that you get put your money in a savings account where your money will work for you is critically important. Here are 3 dangerous things you need to look out for.

1. Penalty Fees

One of the biggest things you need to look out for is penalty fees. With high interest savings accounts there are usually a fixed term where you cannot withdraw your capital. When you do, they penalize you and this can either be a withdrawal fee or a rate penalty or both.

2. Hidden Charges

No matter which bank you are with and no matter how many promises they make, there is always fees and charges. Its normal as they are providing a service and the fee is their payment for the service. The problem is if you are not fully aware of all the charges and you think you are getting more interest than you are actually getting.

3. Variable Rates

Often times banks will lure you in with a very attractive rate only to have a small print clause that the rate only applies for the first 6 months and that you are obliged to commit to a 5 year term. Make sure you read the terms of the investment very closely and make sure that the rate really is a high rate.

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