An account you can't withdraw from could help you save money, as you're restricted from making impulse purchases. Your options include a term deposit or a savings account with withdrawal restrictions. Here's the difference:
Check out a range of locked savings accounts accounts that you can't touch below.
Savings accounts are packed with features to help you save money and grow your balance. They offer high interest rates, charge minimal or no fees and typically include a range of incentives to encourage you not to touch the money in your account. These are also called bonus saver accounts. Bonus savers offer a higher interest rate each month you make limited or no withdrawals and when you make regular deposits, providing a great incentive to keep your money in the account and to keep adding to it.
In order to activate this bonus interest rate each month you will need to satisfy certain requirements, which may include:
| Response | |
|---|---|
| I am not planning to get a term deposit | 61.37% |
| 12 months | 16.26% |
| 6 months | 6.29% |
| 24 months | 4.31% |
| 9 months | 3.77% |
| 3 months | 3.5% |
| 60 months | 1.98% |
| 36 months | 1.26% |
| 48 months | 1.26% |
If you don't meet the conditions of the savings account, for example if you don't deposit any money into the account for a month, you'll earn a lower interest rate on your balance for that month, which could be as low as 0.01% p.a. By scheduling an automatic transfer from your salary into your savings account each month, you can quickly build a sizable savings balance. Our savings calculator will help you work out just how much interest you can earn.
As the name suggests, savings accounts are designed to help you save money, not spend it. If you want an account that allows easy access to your money, we suggest opening an everyday transaction account.
Make sure to compare the following when researching the benefits of bonus saver accounts:
A term deposit is another type of savings account that you can't withdraw from. Term deposits are more restricting than savings accounts, as you need to lock your money away for a certain length of time and can't access it at all until the term is finished. If you do need to make a withdrawal, you'll need to give 31 days' notice and pay a penalty. You can choose to lock your money away in a term deposit for one month up to five whole years at a time and the term deposit will pay a fixed rate of interest for the length of the term.
There are a couple of key benefits to term deposits. First, you get the security of a fixed interest rate and a guaranteed return on your investment. If interest rates drop while your money is locked away in a term deposit, you won’t be affected.
Second, these accounts are set up in a way to discourage you from dipping into your savings balance. You typically can’t access the funds in a term deposit without having to give 31 days' notice and paying a sizable fee, so any money you deposit is safe from the risk of impulse-buying and unnecessary spending.
On the other side of the coin, term deposits are not all that convenient if you ever need fast access to your funds in an emergency and you also won’t be able to benefit from any interest rate rises that occur until your deposit matures.
Consider the following features when comparing the pros and cons of term deposit accounts:
Term deposits and bonus saver accounts can both offer many benefits to people who struggle to save money. Make sure you research the benefits and drawbacks of both types of accounts before deciding if either one is right for you.
The main differnce between the two types of accounts is that a bonus saver offers extra interest as an incentive to leave your money in the account, but there's nothing really stopping you from withdrawing. On the other hard, a term deposit requires 31 days notice to withdraw, so it's a lot harder to touch. If you're really bad with impulsive purchases, a term deposit will be harder to access.
SPONSORED: Saving money is about more than just stashing cash. By getting smart with the way you save, you can build wealth better.
Read more…
SPONSORED: From high interest accounts to shopping around, there are all sorts of ways that you can give your savings a boost.
Read more…
SPONSORED: From interest rate to app access, we'll show you the features you could consider in a high-interest saving account.
Read more…
SPONSORED: We take a look at how term deposits can help you save more cash and build wealth.
Read more…Check out Finder's review of Judo Bank's Term Deposit for SMSFs.
Lock in a fixed rate on a range of term lengths between 3 months and 3 years for deposits $1000 or more.
Australian Unity Term Deposit offers you a wide choice of term lengths for your investment, with a fixed rate of return on your money.
Earn a competitive interest rate on terms between 1 month and 2 years with a Challenger term deposit.
With high interest rates offered in a variety of different terms, the AMP term deposit could be ideal for both short and long term saving goals.
When can you expect term deposit interest rates to increase? Find out in this handy guide.
When your term deposit matures it's time to decide the next move for your money. Here are your options, including term deposit rollover (tdr).
Set your own terms and conditions for how your money grows with a flexible investment account that rewards you with higher interest earnings.
Australian Military Bank’s Investment Plus term deposit lets your money earn competitive interest. You can choose a term as per your liking.