Are you getting the interest rate you deserve?
Isn't it time you Saved more Money with Higher Interest and Lower Fees? A high interest savings account allows you to earn a high rate of interest on your savings. Don't let your savings sit idle in a transaction account earning no interest. Instead, open up a high interest savings account that can be opened online within minutes.
Rates last updated October 1st, 2014
Here we guide you through choosing the best savings account* for you, and using it to your advantage.
You first step is to consider accounts based on the following situations:
- Savings Money If You're In Debt
- Saving Money When You Have A Mortgage
- Are You Able To Put Money Aside Regularly?
- Are You Able To Fix In Your Savings?
- Are You Married Or Part Of A Couple?
More advanced savings topics:
- The Benefits Of The Best High Interest Savings Account*
- How To Compare The Best High Interest Savings Accounts*
- The Account Features To Expect
- How To Use The Savings Priority Strategy To Save More Money
- Tips To Help You Make The Most Of Your Savings
- How To Beat Inflation
Most of us have been encouraged to save from the time we received our first payment of pocket money, but a successful, long term savings plan which can take you from pocket money to retirement fund requires a little careful planning, and the right tools.
What Sort Of Saver Are You?
Few of us have a natural instinct to save because it is much more fun to get out there and enjoy life now and not worry about the future. At the same time it is possible to tailor your savings plan and make a genuine investment in your future by playing to your strengths and natural inclinations. For example using a high interest savings account is not for everyone and you may be better suited to investing rather than saving. When you save using a dedicated account there is no risk, you are required to be minimally involved and you will get back your savings with interest on top.
When you invest in the stock market for example it is possible to see higher returns over the long term as compared to a savings account. However when you invest you risk losing interest earnings and you can even lose your initial investment. To make the decision between saving or investing you need to decide whether risk outweighs reward on whether you have the time to spend researching and managing a share portfolio or whether you would prefer the more guaranteed returns of a savings account.
You are now ready to find the perfect savings strategy and product for you, based on how you answer the following questions.
Are You In Debt?
It is important to know that if you have any debt it makes better financial sense to repay this debt before you start to save. This is because the interest you are being charged on your credit card debt or personal loans is likely to be higher than the interest you will earn in a savings account therefore any gains you make with your savings will be cancelled out by interest charges.
While it is still important to have savings for a family holiday or a family emergency consider whether you would be better off repaying your debt sooner with the funds you would have contributed to a savings account. For example if you have a $1000 credit card balance which is being charged 18% interest and you have $1000 in a savings account which owns you 2% interest after tax than you would be $160 a year better off if you just repaid your credit card before you started saving..
Do You Have A Mortgage?
While the interest rate you are being charged on your mortgage is probably less than a standard credit card interest rate is still likely to be more than you will be earning in your savings account especially since the interest earned on your savings is taxed. Therefore you may be better off making additional repayments to your mortgage, as long as your lender doesn't charge you for this feature, and working to repay your loan sooner and save interest.
If you have a mortgage but still want the security of an emergency fund for example ask your lender about a mortgage offset account which is a separate savings account linked to your home loan which reduces the amount of interest you are charged on your loan, and the best part is while you are taxed on interest you earn you are not taxed on interest you save. For example if you have a $250,000 mortgage and you have $10,000 of savings in your 100% offset account then you are only charged interest on $240,000.
Can You Make Regular Monthly Contributions To Your Savings?
The amount you can budget to save each month can determine the type of savings account which is best* for you because some savings accounts will reward you with bonus interest if you are able to deposit a certain amount each month or if you are able to increase your account balance by a certain amount each month.
Alternatively if you already have a lump sum of savings which you want to have working harder for you look for a savings account which gives you bonus interest tiered on the account balance. You can then continue to make your savings contributions to this account or open a separate account which rewards you for regular contributions to build up a new lump sum amount.
Are You Able To Fix Your Savings?
A fixed-rate savings account, also known as a term deposit account, can earn you a guaranteed interest rate over a set term of your choosing and where the interest-rate on a traditional savings account can go down according to the Reserve Bank decisions, your interest earnings and returns are guaranteed. However this also means that if official interest rates go up the interest rate on your fixed savings account will not.
In choosing a fixed rate savings account you also have to be sure that you can budget and meet your everyday expenses and any emergencies which come up without access to your savings because if you withdraw the funds from a term deposit before the end of the term you can jeopardise the interest earned.
Are You Married Or Part Of A Couple?
If you are married or part of a couple there can be taxed benefits to saving in the name of the partner who is in the lower tax threshold. Even if you combine incomes and shared bill paying expenses if you hold your savings account in the name of the lower rate taxpaying partner then you will both have more money to enjoy together.
Also if you are not married there is no tax if you give your partner a gift, which they can then put into their savings account which is taxed at a lower rate. Whether you are married or part of a couple and want to avoid some tax charges in this way be aware that the money in your partner's name is legally there if things go sour.
St.George Savings Account Offer
Enjoy the benefits of a savings account with one of the Australian most trusted banks. Get a great introductory rate and a high ongoing rate thereafter.
- Maximum Rate: 3.95% p.a.
- Standard Variable Rate: 2.25% p.a.
- Bonus Rate: 1.70% p.a.
- Monthly Account Fees: $0
- Minimum Balance: $1
- Minimum Deposit: $1
Why You Need The Best Savings Account*
There are so many different types of savings accounts available, and even within one bank or financial institution, you are likely to find several different types of savings accounts. This is because everyone receives, spends and uses their money differently, and there is a savings account for each budget, spending habit and financial goal. Therefore, it is in your best interests to compare the savings accounts available before you choose, because you could easily be using the wrong account.
The Benefits Of The Best Savings Account*
There is no such thing as THE best savings account* in Australia, if there was your search would be over because we were just tell you which one it was. Instead there are hundreds of different savings accounts available from a range of different banks, credit unions and building societies across Australia so that you can find the account which best suits you, your financial situation and your savings habits because when your savings account fits properly your savings plan can more easily fall into place.
Therefore instead of making the mistake of thinking that all high interest savings accounts are the same, find out just how important it is that you are using the account which fits you best. You need to be using the right savings account for your needs because:
- You need to be able to access your savings when and where you need them - If you are working hard to build an emergency fund then a fixed-rate savings account is probably not right for you because you need access to your funds at a moment's notice, instead an online savings account linked to your transaction account from the same provider will give you this instant access. If you travel overseas regularly then you need a savings account which you can access from anywhere in the world, alternatively if you are a busy parent then you need a savings account which allows you to pay your bills online or over the phone quickly and easily.
- You can reach your savings goals sooner - If you choose a savings account which rewards you for the regular contributions you are able to make or for the high balance you are able to maintain then this bonus interest can help you reach your savings goals sooner whether you are saving for a rainy day or a renovation to allow you to add an outdoor room so you can enjoy your backyard on a rainy day. If you choose a savings account which will reward you for the way you use your account, rather than penalise you, then you will lose less money in fees, and have more money in your account. For example, if you don't like to carry cash but prefer to use EFTPOS to pay for purchases, then you will benefit from a savings account with unlimited transactions.
The easy access of online savings accounts and online banking means that banks are able to pass on their savings to customers. There are plenty of ways for customers to benefit from these types of accounts as compared to a regular savings account.
There are many banks offering great benefits for customers willing to utilise online savings accounts. The introduction of online banking can mean far less overheads for many banking institutions and in order to attract new clients to open a savings account, they're passing on their cost savings to customers. This can mean customers are receiving better deals than ever before.
Will Online Savings Accounts Suit You?
There are some limitations to applying for online savings accounts, but overall the ease of online banking can minimise any problems for most types of customers. If you're searching for a savings account to keep your money for a rainy day, these types of accounts can allow you to add to your savings regularly.
You can add money to your online savings accounts quickly with an electronic transfer from your existing transaction account. Another benefit with online banking is that you don't have to tie up your money for long periods of time, as you would with a term deposit account.
The benefit of easy access to your funds plus the advantage of higher than normal interest rates on your savings can be very attractive to people wanting to boost savings.
Delay In Withdrawing Funds
While it might seem like a disadvantage to some, customers are only able to access online savings accounts by withdrawing their funds electronically to a nominated savings account.
This kind of electronic transaction can sometimes take 3-5 days to clear, so there is a delay in accessing your money. For customers used to spending their funds whenever they choose, this can be a great deterrent and actually make it easier to spend less on impulse purchases.
Finding The Right Online Savings Account
Even though most online savings account offer customers plenty of great savings account interest rates, it's still important to shop around for the right online banking account to suit you.
Always check whether you'll be required to maintain a minimum account balance in your online account. You should also check whether there are any restrictions on making deposits or withdrawals from your account.
Some banks also only offer bonus interest rates to customers who make regular savings contributions. If you don't feel that you can do this, check whether your account will allow you good interest rates regardless of whether you're depositing regularly or not.
How to Compare Savings Accounts
The comparison tables here at Savings Account Finder give you all of the information you need to know before you choose a savings account. The most important information is available at a glance, so you can save time and money right away.
Comparing providers and high interest savings accounts based on their standard features gives you a base line from which to get an idea of the providers and the types of accounts which would best suit your needs, and which target your particular savings habits. Just as a clothing store targets their products at people from a particular age group and style, so too do savings account providers offer a different focus for their particular type of customer.
What to look for in your savings account comparisons, and why:
- Compare the interest rates - If you are looking to open a savings account as an investment, then choose one with a high interest rate, and an interest rate which is ongoing. If you are opening a savings account for a short term goal such as a new TV or home extension, then a promotional interest rate is perfect for you because your savings will get a boost, and you ll be gone before the promotion ends. Alternatively, if you are looking for an everyday account, interest rates may not be as important as accessibility for example.
- Compare how you access your savings account - If you want to open an everyday savings account, you want to be able to quickly and easily access your money, wherever you are. Therefore, you will need to compare savings accounts based on whether you are provided a cheque book, an ATM access card or a debit card linked to your account. You also want to find out how much you will be charged for each of these transactions if you are going to be making them regularly. Do you plan to make regular branch visits too? Then you need to find the savings account which doesn't charge you extra for this service. However, if you don't have time to visit a branch then an online savings account may compare better.
- Compare online savings accounts - If you are pressed for time, and can only do your banking on the run, or outside business hours, then you need to compare the connectivity of the savings accounts available. An online savings account will allow you to apply online and conduct all of your transactions and transfers via internet banking. Compare the savings accounts which offer online access to your bank statements, and those which let you change your password or access code online, without making you visit a branch.
- Read everything and then discard what is irrelevant - If you start with the first point we have mentioned at the top of the page, and determine your savings needs and financial behaviour, you will know what you need from a savings account. Therefore, after you have read the fine print about the interest rates, the fees, the online application process and the access cards and cheque book additions, you can decide which account has the inclusions you really want, and which is offering specials you don't really need.
- Fee free savings accounts. All high interest savings accounts should be fee free and not charge you any opening or transaction fees on your account.
- The type of linked account. Almost all high interest savings accounts will ask you to link an everyday transaction account to your savings account for easy transfers and deposits. However, compare the savings accounts based on whether you can use your own existing transaction account or whether you have to open a linked transaction account with the same provider. Also compare the transaction fees from your everyday account to your savings account because it may be worth opening a linked account with the same provider, so you'll also need to compare transaction accounts too.
- Interest calculated daily and paid monthly. This allows you to earn compounding interest on your savings, that is, you'll be earning interest on your interest because the interest is being calculated and added to your balance daily, but not deposited until the end of the month.
- A high interest rate. The interest rate offered on your savings account should be at least as high, if not several percentage points higher, than the Reserve Bank of Australia's official cash rate. This is because the banks base their standard variable rates on the RBA's cash rate and where the SVR on their home loans will be higher than the official cash rate, so too should the SVR offered on their savings products.
Now you know what you are looking for, read our savings account reviews and information about other financial products which may suit you, for example a high interest savings account, or even a term deposit. With all of the information you need to find the best savings account* for you, we have made it even easier to apply as you can travel through a secure link from our website to apply for the savings account of your choice today. Compare a savings account with a term deposit.
When comparing savings accounts to choose the best one for your needs you need to know which are the features which are negotiable and which are the ones you should expect from all high interest savings accounts, no matter what. Knowing the standard features and the extras helps you compare the top savings accounts for the features you actually need, rather than wasting time comparing savings accounts which offer bonuses and incentives which won't actually help you meet your savings goal or overcome your financial bad habits.
Compare Additional Features Of Savings Accounts
Comparing the savings accounts with the best standard features for your needs may have left you with a short list, and this is where you can start to look at the extras which may suit you. You can then decide which fee free, high interest, easy access savings account from above, has the best comparable features from the list below:
- Bonus interest on deposits. If you see yourself making regular deposits into your savings account because you are saving for a long term or specific goal then compare the savings accounts which offer bonus interest for regular deposits.
- Bonus interest when you make no withdrawals. If you are building an emergency fund or saving for a house deposit you are going to make very few withdrawals, so compare the savings accounts which offer the best bonus interest for the months you make no withdrawals.
- Existing personal linked transaction account. If you are happy with your existing transaction account and know there are no additional fees for internet transfers to your savings account, compare the savings account providers which will allow you to link to an external transaction account. Linking to a transaction account with a different provider also removes the temptation of instant access to your savings as you have to wait at least two business days for your transfer to arrive from your savings account.
- Open a new linked transaction account. If you are in the market for a new transaction account too, then compare the savings account providers with inclusive transaction accounts on offer too. Using a linked transaction account from the same provider also means no transfer fees, plus transfers arrive in your savings account instantly, to be earning interest right away.
- Sub-accounts for more than one savings goal. Compare the number of sub-accounts you can open with your high interest savings account if you are saving for more than one thing. You may want to have an emergency account, a holiday account, a school fees account and a shopping account so make sure you compare the number of sub-accounts you can open, and the ease with which you can create, rename, transfer and delete these accounts too.
- Inclusive online application. If it is important to you to save time online, then choose a savings account with an intuitive and inclusive application. Many online savings accounts will allow you to choose an account password within your online application as well as nominate an initial deposit form your linked account and set up a regular payment schedule.
Making comparisons of the best savings account*s is really about deciding which are the most important features for your savings goals, and then looking at the providers which offer the best of those features. To help you with this process we have compiled a comparison table of the top high interest savings accounts here. Once you have selected the account with all the features you need and want you can sign up via our secure links to start your savings plan today.
How To Compare The Best High Interest Savings Accounts*
At Savings Account Finder we want to make your comparisons as easy as possible so find out more about what you are looking for in your comparisons and how to decide which is the most important feature an information for you.
As you make your savings account comparisons make sure you:
- Choose the interest rate which matches your needs - High interest savings accounts can be used for a long-term investment because they are so safe and easy to use and in this case you would need to choose the highest ongoing interest rate because you are in this for the long haul. Alternatively if you are saving for a short term goal then you can benefit from a promotional interest-rate which is initially higher, but after the promotional period ends it reverts to a lower rate but by this time you will have reached your savings goal and be on your way.
- Choose access features you can use - The majority of high interest savings accounts will be opened and managed entirely online, in this way they are able to offer you high interest rates and zero fees. However while this may suit young couples or busy individuals who are able to do their banking online at the time of day, if you are choosing a savings account for your child or if you would prefer branch access then seek out a savings account which allows you to make cheque deposits and includes branch visits, rather than assuming these features are automatic.
- Don't discard online savings accounts - Whether you want a more tangible connection to your savings or you have yet to embrace internet banking in your everyday life, some of the highest interest rate and lowest fee savings accounts are those which are operated entirely online. This is because it is cheaper for the financial institution to operate online, and they pass these savings onto you. Plus, while you may not be ready to do all of your banking online, starting with an online savings account can ease you into the process, while removing you from the temptation to spend funds which are easily accessed at a branch or via an ATM.
- Know what you are looking for - Your answers to the questions at the top of this page will have helped you to determine the type of saver you are, and the type of account you are looking for. Therefore, as it comes time to make your comparisons, you can more easily determine which accounts are worth considering and which don't have the features you need, and as you read the fine print and compare the rates, application process and features, you can make your decisions decisively, because you either want those features or you don't.
- Compare all of the information and advice on your type of savings account - Savings Account Finder offers you more than just comparison tables, we also provide comprehensive reviews and advice to help you make the right decision, and maximise your returns. For example, if you know you can make regular contributions, and you know you need an account which pays you bonus interest, find out how to maximise that bonus interest by depositing your funds on the right day, at the right time.
- Choose a safe provider - It was once easy to think that all banks were the same, each one as safe as the next, and none of them were really putting your savings at risk. However, as we saw one bank after another fall around the world, taking the savings and investments of people just like you with them, a comprehensive comparison will include the security of the financial institution. While banks appear safer (and project that image) than smaller credit unions or building societies, the security of a provider comes down to their credit rating and the way their business is run. You can check the credit rating of any provider you are considering as this is publicly available information, and while all of the Big Four Banks are rated AA so are many second tier banks.
The Account Features To Expect
While the features and inclusions of each high interest savings account will differ and each provider will promote a different aspect of their savings plan, there are a number of basic features you can expect from all high interest savings accounts. Knowing what to expect can help you sort the hype from the real benefits because you will know whether an account is really offering a unique feature, or just highlighting a standard feature of the genre.
When comparing high interest savings account features you can expect to be getting:
- A fee free savings account - All high interest savings accounts should be fee free and not charge you any opening or transaction fees on your account.
- A linked account - Almost all high interest savings accounts will ask you to link an everyday transaction account to your savings account for easy transfers and deposits. However, compare the savings accounts based on whether you can use your own existing transaction account or whether you have to open a linked transaction account with the same provider. Also compare the transaction fees from your everyday account to your savings account because it may be worth opening a linked account with the same provider, so you will also need to compare transaction accounts too.
- Interest calculated daily and paid monthly - This allows you to earn compounding interest on your savings, that is, you will be earning interest on your interest because the interest is being calculated and added to your balance daily, but not deposited until the end of the month.
- A high interest rate - The interest rate offered on your savings account should be at least as high, if not several percentage points higher, than the Reserve Bank of Australia's official cash rate. This is because the banks base their standard variable rates on the RBA's cash rate and where the SVR on their home loans will be higher than the official cash rate, so too should the SVR offered on their savings products.
The Account Features Which Can Set You Apart
So now you know what to expect from a standard high interest savings account, you can demand more features, more value for your savings and an easier to use account. While not all financial institutions will offer all of these additional features with their accounts, you can easily shop around with this shopping list to find the account which has the selection you want and need, rather than paying extra for an account which has features you won't use.
Expect more from your high interest savings account, such as:
- Bonus interest on deposits - If you see yourself making regular deposits into your savings account because you are saving for a long term or specific goal then compare the savings accounts which offer bonus interest for regular deposits.
- Bonus interest when you make no withdrawals - If you are building an emergency fund or saving for a house deposit you are going to make very few withdrawals, so compare the savings accounts which offer the best bonus interest for the months you make no withdrawals.
- Existing personal linked transaction account - If you are happy with your existing transaction account and know there are no additional fees for internet transfers to your savings account, compare the savings account providers which will allow you to link to an external transaction account. Linking to a transaction account with a different provider also removes the temptation of instant access to your savings as you have to wait at least two business days for your transfer to arrive from your savings account.
- Open a new linked transaction account - If you are in the market for a new transaction account too, then compare the savings account providers with inclusive transaction accounts on offer too. Using a linked transaction account from the same provider also means no transfer fees, plus transfers arrive in your savings account instantly, to be earning interest right away.
- Sub-accounts for more than one savings goal - Compare the number of sub-accounts you can open with your high interest savings account if you are saving for more than one thing. You may want to have an emergency account, a holiday account, a school fees account and a shopping account so make sure you compare the number of sub-accounts you can open, and the ease with which you can create, rename, transfer and delete these accounts too.
- Inclusive online application - If it is important to you to save time online, then choose a savings account with an intuitive and inclusive application. Many online savings accounts will allow you to choose an account password within your online application as well as nominate an initial deposit form your linked account and set up a regular payment schedule.
The Savings Priority Strategy
When you are managing your savings you want to be sure you have as much of your money working as hard as possible for you, while still being able to access it when you need it. Therefore, consider spreading your savings plans and savings funds across several types of savings accounts, to help you consistently grow your savings, while still giving you flexibility when you need it, not to mention disbursed risk.
To follow the Savings Priority Strategy:
- Find a savings account which rewards you for regular deposits of a certain value - These types of accounts will require you to make a deposit of usually $50 - $100 a month and in return will pay you a bonus interest rate that month.
- Set up a regular transfer from your wages, for the qualifying amount - Set up an automatic transfer for the required amount to qualify for bonus interest, because while contributing more each month will earn you more interest, there are generally no more bonuses available.
- Find a standard savings account - This account will have an ongoing high interest rate and this is where you should deposit the rest of your savings allocation, which overflows from your bonus savings account. The rate may not be as high as the bonus rate on your priority account, but as you build your balance you increase your interest earning capabilities.
- A savings account with an ongoing high interest rate gives you freedom - You can deposit as much or as little as you like each month, and withdraw those funds again if you need to cover an emergency, or realise a savings goal; accounts which offer bonus interest for deposits often don't allow you to make withdrawals and still qualify for a higher rate.
Inside Tips On Saving
If you have ever wondered how some people seem to be able to afford the latest technology, modern furniture and exciting holidays, the truth is they probably don't earn any more than you do, they simply put these common sense savings tips, and this inside knowledge and advice into practice.
As you consider your savings strategy and compare the best savings accounts*, remember:
- Beware of promotional interest rates - Many high interest savings accounts will offer an even higher rate for an introductory period when you first sign up for the account. However, once this promotion ends the standard rate on the account can often be much lower, but if you are willing to move your savings to follow promotions you can benefit from rolling bonus interest.
- Look for fixed promotional rates - Some promotional introductory rates are calculated at a certain percentage above the provider's standard rate. For example the standard rate on a high interest account may be 3.50% and as a new customer you receive a bonus 1.50% interest for the first six months your account is open. However, if official rates drop during that time, and your provider follows suit, their standard high interest savings account rate may drop to 2.50% so where you were earning 5.00% interest, you are now earning just 4.00% interest, and it could continue to drop during your six month promotional period. Alternatively, other providers may offer a fixed 5.00% interest rate for the first six months your account is open, so you are guaranteed this rate, no matter what.
- Know the account you want - Not all financial providers are above the bait and switch strategy of attracting customers, and will advertise an attractive interest rate on a savings account, and when it comes time to sign up, you will find yourself with an account which has a similar name, but which pays a much lower rate. Therefore, always read paperwork and fine print carefully, and know exactly which account you want, and what you are entitled to.
- You may have to wait to access your funds - Make sure you know how and when you can access your funds before you find yourself in need of your savings. Savings accounts can offer you instant access where you can withdraw your cash at a branch, however, if you make the withdrawal over the phone or via online banking, if your linked account is with another provider you can be waiting up to 5 business days for the transfer to be completed.
- Don't be penalized for withdrawals - Make sure you know about any limits on the number or value of withdrawals you can make from your savings account in a year. Also be aware of whether your interest earnings will be penalized if you make a withdrawal.
How To Beat Inflation
Inflation is the rate at which the cost of living increases, and the primary role of the Reserve Bank of Australia, and their management of the cash rate, is to keep inflation in check. As a result the RBA aims to keep inflation at around 2-3% each year.
When it comes to your savings, inflation can eat into your interest earnings because if you are saving for a purchase you want to make in a year or two years time or even for your retirement then you are going to need to save enough for what that purchase will cost at the time you make it, not what it costs now. As a result, if your savings do not increase at a rate higher than the inflation rate, you can be losing money by saving.
Not only do your savings need to be earning more than the rate of inflation now, but they need to beat inflation each and every year for you to have a strong savings account. Therefore, make sure your savings account interest rate is more than the current rate of inflation.
If you are longing for the days when saving was as simple as putting your spare pocket money into your piggy bank then you are not alone. Thousands of Australians are without a regular savings plan, or a strong savings account balance, but luckily it is never too late to turn that around. Now you can pinpoint your financial situation, and follow this guide to find the best savings account* and savings plan for your needs, you can be one of those Australians who can look forward to the future, because you know you are prepared.