High Interest Savings Accounts Comparison

A high interest savings account is an account specifically designed to help you visualise and meet your savings targets. Most high interest savings accounts are online accounts to reduce the temptation to spend your savings, and most will also be fee free so you can set up your savings plan and not worry about your money being eaten away. However, banks and financial institutions know that everyone has a different saving and spending personality and therefore, there are a range of high interest savings accounts with features to further curb temptations if required, or to reward you if you are able to boost your savings.

High Interest Savings Account Comparison

Savings Account	Account Details	Intro Rate p.a.	Variable Rate p.a.	Intro Period p.a.	Fees	Min Balance and Min Deposit
ING Direct Saver	5.85% p.a. for the first 4 months of opening the account	5.85%	4.50%	1.35%	FREE	$1
St.George Direct Saver	5.75% p.a. 4 months if you open account before 30 June 2010	5.75%	4.20%	1.55%	FREE	$0
Citibank Online Saver	5.71% p.a. for 6 months, highest promo rate on the market.	5.71%	4.25%	1.46% for 6 months.	FREE	$0 – $1.99m max investment
Bankwest TeleNet Saver	5.62% p.a. for 12 months, longest promo rate on the market.	5.62%	4.00%	1.62% for 12 months.	FREE	$0 – $5m maximum investment
ANZ Online Saver	5.50% p.a. until 30 June 2010, Apply online before 30 Mar 2010.	5.50%	4.25%	1.25%	FREE	$0
NAB iSaver	5.40% p.a. opened before 13th April 2010	5.40%	3.75%	1.65% for 4 months	FREE	$1
Members Equity Savings Account	4.85% p.a. high ongoing rate	4.85%	4.85%	-	FREE	$0
Suncorp eOptions Saver	4.25% p.a. variable rate	4.25%	4.25%	0.00%	FREE	$0

How to maximise interest on your savings

Gone are the days when savings were made in piggy banks, or stashed under the mattress; you can have your savings working hard for you long after you’ve worked hard for them. Where high interest returns on your savings could only previously be found in long term, contracted term deposits and the like, more Australian banks and financial institutions are rewarding the desire to save for the future by introducing easy to use, online based, fee free high interest savings accounts.

While it is easy to deposit an amount from your wages into your high interest savings account each month, there are several ways you can increase your savings interest even further, just as easily.

Find a High Interest Savings Account

While there has been a rise in high interest savings accounts, they have not all been created equal. Therefore, find the account which is going to help you maximise the interest on your savings, by matching it to your spending habits and savings targets.

For example, some high interest savings accounts will allow you to make as many deposits and withdrawals in a month as you like which is perfect if you often run into emergencies and require urgent funds, or if you make sporadic contributions to your savings accounts. However, if you are able to deposit your savings and forget about them, then you can make use of accounts such as the NAB Smart Reward Saver which gives you bonus interest when you make at least one deposit per month and no withdrawals for the same month.

Also, if you have a high amount of savings you want to deposit in a flexible high interest savings account, you can often negotiate a higher interest rate, as many financial institutions will compete to win your custom.

Move, to Maximise Interest on Savings

Many high interest savings accounts will offer very attractive introductory, or promotional interest rates on their accounts; sometimes these rates can be as much as one or two per cent higher than the normal rate offered on the account. Therefore, to maximise the interest on your savings, follow these promotional rates. These types of accounts are opened and operated online, they also trade on their flexibility and generally you won’t be penalised for opening or closing an account, or suddenly withdrawing your savings to follow a higher promotional interest rate – however, it is important to check for any fees first.

Another important part of moving your savings is knowing how long it takes to be moved. Some savings accounts will process a transfer in one to two days, others take five to seven business days. In an account where interest is calculated daily on your savings, losing those earning days while your money is in transit will decrease your savings interest in the long term.

Increase Savings Interest Daily

Having the interest calculated daily on your savings may not seem important, but if you are able to make regular deposits to your high interest savings account, you can effortlessly maximise the interest earned on your savings.

For example, if you regularly transfer $600 to your savings account each week, over the course of a month you will earn almost double the interest in an account where interest is calculated daily, compared to if you had made just one $2,000 deposit at the end of the month. This is because your savings are earning compound interest; that is you are earning interest on your interest throughout the month, and it is as simple as setting up a direct debit from your wages each week.

To further maximise the interest earned on your savings, make use of the interest free days on your credit card. By having your wages deposited into your high interest savings account, they can earn interest every day of the month while you use your credit card for all spending. At the end of the month, after the interest has been paid on your savings, transfer what you need to pay off your credit card, leaving the interest earned in your savings account, to continue earning.

These simple financial strategies can easily increase the interest you earn on your savings each month and while your spending lifestyle won’t be disrupted, your savings will be working overtime, so they can come out and play in your leisure time.

To compare the high interest savings accounts which will best help you maximise your savings:

• Decide why you are saving and why you need a high return – it’s alright to have more than one savings goal.
• Be honest about your savings behaviour and whether you will be tempted to dip into your savings.
• Look carefully at your lifestyle and income and decide whether you need access to your high interest savings account as an emergency fund.
• Choose the high interest savings account with an interest rate, access and fee structure which suits all of these facets of you and your financial personality.

Why Compare High Interest Savings Accounts

While all high interest savings account aim to offer the highest returns to savers with the least paperwork, effort and fuss, that doesn’t mean you don’t need to carefully compare the products. In the same way you wouldn’t sign up for the first home loan you read about or buy the first car you test drove, don’t sign up for the first high interest savings account you see, until you have compared the features.

By comparing high interest savings accounts you can maximise your interest earned:

• If you won’t make withdrawals, be rewarded. If you know you can avoid making withdrawals from your high interest savings account after setting up a regular savings plan, then choose a high interest savings account which will reward you with an even higher interest rate when you make only deposits.
• If you need emergency funds, don’t be penalised. If you find you have to dip into your savings to cover emergencies because your life is not in a smooth and straightforward place right now, then choose a high interest savings account which offers you a high interest rate regardless of the balance, the number of deposits, and the number of withdrawals.
• Choose a flexible interest rate because rates are rising. The Reserve Bank of Australia has made no secret of more interest rate rises to come into 2010, so choose a high interest savings account from a financial institution which guarantees to follow the RBA’s interest rate on their savings account returns.
• Don’t pay fees on your funds. If you make some smart comparisons you can find a high interest savings account which won’t charge you fees for the way you use your account. Where most high interest savings accounts are fee free, some must be linked to an external personal account from which you transfer your savings. As a result, some of these external accounts may charge you fees to set up a direct transfer to your savings, or charge you when you make a high number of deposits. Therefore, choose a high interest savings account which can stand alone, or which can be linked to another fee free (or low fee) account.
• Maximum interest is calculated daily. You may be surprised to learn that you can maximise your savings simply by choosing a high interest savings account which calculates interest daily. When interest is calculated daily, it is calculated as compounding interest, so you are earning interest on your interest throughout the month.

How to Compare Interest Rates

The interest rate earned on your high interest savings account is one of the most important features, but to truly compare the best interest rate, you will have to read the fine print, so we have enlarged it for you here:

• Is the interest rate a promotional one? Many financial institutions will run specials on their high interest savings accounts and offer special higher interest rates, which are set to expire. Therefore, it pays to compare when that promotional rate will end, and if you have to sign up before a certain date – at the same time, don’t be rushed into signing up for a high interest savings account because of a high interest rate, read the rest of the fine print we’ve enlarged for you here.
• Is the interest rate introductory? Similar to a promotional interest rate, an introductory interest rate won’t expire on a certain date, but will expire a certain number of months after you have opened your account, so beware when the time runs out.
• Is the interest rate conditional? Some high interest savings accounts will require that you make a certain amount of deposits in a month, maintain a certain balance, or make no withdrawals in a month to be eligible for their highest interest rate. If you don’t meet these requirements, you may suffer a much lower interest rate.
• How is the interest rate calculated? While you should be looking for an account with interest calculated daily, you should also find out what that interest rate is made up of – for example, some banks and financial institutions will base their interest rate directly on the RBA’s cash rate, while others will use their own standard variable rate as the interest rate for their high interest savings accounts. Still other financial institutions will use either the cash rate or a standard variable rate, and combine that with an additional rate to create a special rate for their high interest accounts. Knowing how your interest rate is calculated will allow you to gauge when, if and by how much it might change.

At Savings Account Finder we have read all of the fine print and more to offer you in depth comparisons of all high interest savings accounts available to Aussie savers. We have also compiled savings tips and advice to help you choose the account which best suits you and will help you maximise the interest earned on your savings. All you have to do is look over our product reviews and sign up securely online to start achieving your savings goals.

High Interest Savings Accounts Resources

• Highest Interest Savings Accounts in Australia