maximise savings

How to maximise your savings in a low interest rate world

Just because interest rates are at an all-time low doesn’t mean you can’t build your savings balance to an all-time high.

On 2 August 2016, the Reserve Bank of Australia cut the official cash rate to a record low of 1.50%. While the latest rate cut was undoubtedly great news for home loan borrowers, it was not the announcement that savings account holders were hoping to hear.

But while low interest rates certainly have an effect on the speed at which you can grow your bank balance, there are still plenty of other steps you can take to maximise your savings.

Rates last updated February 20th, 2018
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Monthly Account Fee
RaboDirect High Interest Savings Account
Introductory rate of 3.05% p.a. for 4 months, reverting to a rate of 1.80% p.a. Available on balances below $250,000
3.05% 1.80% 1.25% $0 $0 / $1 Go to site More
Bankwest Hero Saver
Ongoing, variable 2.60% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
2.60% 0.01% 2.59% $0 $0 / $0 Go to site More
HSBC Serious Saver
Introductory rate of 3.00% p.a. for 4 months, reverting to a rate of 1.60% p.a. Available on balances below $1,000,000.
3.00% 1.60% 1.40% $0 $0 / $0 Go to site More
ANZ Progress Saver
Ongoing, variable 1.71% p.a. when you deposit $10+ each month and make no withdrawals. Available on the entire balance.
1.71% 0.01% 1.70% $0 $10 / $10 Go to site More
Westpac Life
Ongoing, variable 2.30% p.a. each month you deposit money, and make sure your balance is higher at the end of the month than it was at the beginning. No monthly account-keeping fee.
2.30% 1.50% 0.80% $0 $0 / $0 Go to site More

Work out a savings plan

Take some time to think about what you’re saving for. Do you have any particular goals or purchases in mind, or do you simply want to build your balance as much as possible? Once you’ve set yourself a financial goal you can work out a savings plan to help you get there as soon as possible.

An effective savings plan will outline how much you plan to save, the timeframe in which you will make it happen and how much money you plan to deposit into your savings account each week. You can also use one of our handy savings calculators to work out the logistics of your savings plan.

Of course, another important part of any savings plan is working out where you can cut back on expenses. From gym memberships to eating out, there are plenty of ways you can reduce your spending and have more money left over to put towards your savings.

Make regular deposits

The best way to maximise your savings is to make sure you actually save money. If you set up a direct debit so that a portion of your salary goes straight into your savings account as soon as you’re paid, you can automate the savings process and ensure that your balance grows every week.

This removes the temptation to spend rather than save your money, and you will probably be surprised at just how quickly your balance grows when you make regular deposits. Some accounts will even offer bonus interest if you deposit a minimum amount each month.

And if you get any windfalls, for example, a tax return or a bonus from your employer, make sure to deposit this into your savings account as well. The more money in your account, the more interest you will earn.

Earn bonus interest

Speaking of bonus interest, there are some special types of bank accounts that allow you to maximise your savings balance by paying bonus interest on top of the standard variable interest rate. These are known as bonus saver accounts. However, in order to access this bonus rate, you will need to satisfy specific terms and conditions, such as:

  • Depositing a minimum amount each month
  • Making a limited number of withdrawals (or even zero) per month
  • Maintaining a minimum balance
  • Opening a linked transaction account

If you fail to meet any of these terms and conditions, you will only receive the standard variable rate on your account for that particular month. That rate can be as low as 0.01% in some cases, so it pays to make sure you always satisfy the necessary requirements.

Be disciplined

One of the biggest barriers to saving is the temptation to dip into your balance at any given time. Maybe there’s a new pair of shoes you want, you’re desperate for a holiday or you’re just running a bit short on cash. Whatever the reason, it’s important that you resist temptation whenever possible. If you can stay strong and leave your savings account untouched, your bank balance will grow a lot faster.

If you’re the type of person who always dips into their savings, you may want to consider taking steps to make it harder to do so. For example, you could open a savings account with a different bank to your regular bank, or you could invest your money in a term deposit.

Compare your options

If you want your money to work harder for you, it’s essential that you choose the best account for the job. So instead of just signing up for the first savings account you come across, compare a range of accounts and shop around for the best interest rate and an account that charges minimal or zero fees.

Far too many people opt for the simple option of opening a savings account with their regular bank because it’s convenient. If you just do a quick comparison you’ll be able to find an account that offers a much better deal. makes it easy to compare a wide range of savings accounts, so start the comparison process today.

Consider a term deposit

When the Reserve Bank cut the official cash rate to 1.50% in August, the major banks did not pass the full rate cut on to their customers. Instead, they raised term deposit interest rates. The following rate rises were implemented by the Big Four:

  • Commonwealth Bank of Australia (CBA) increased its one-year term deposit rates by 0.55% to 3%, raised two-year deposits to 3.1% and raised three-year deposits to 3.2%.
  • NAB increased its eight-month term deposit rates by 0.85% to 2.9%.
  • ANZ increased rates for its one-year advanced notice term deposits by 0.6% to 3% and for its two-year deposits by 0.75% to 3.2%.
  • Westpac boosted its one-year term deposit rates by 0.55% to 3%, its two-year deposits by 0.45% to 3.1% and its three-year deposits by 0.55% to 3.2%.

Term deposit interest rates represent some of the best on offer at the moment, so it’s definitely worth considering locking some of your savings away in one of these accounts to provide a substantial boost to your savings balance.

Consider a notice saver account

Another option you could consider is opening a notice saver account. These types of accounts often offer a higher rate of interest than a regular savings account, but with the caveat that you will need to notify the bank in advance when you want to withdraw any funds. There are 30-, 60- and 90-day notice accounts available, so compare the interest rates and features these accounts offer to determine whether they could be right for you.

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Interest rates may be low, but there’s plenty you can do to ensure that your bank balance remains as healthy as possible and continues to grow. Start taking steps today to maximise your savings and enjoy a secure financial future.

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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Important Information*
Bankwest Hero Saver

Maximum Variable Rate


Standard Variable Rate

ANZ Progress Saver

Maximum Variable Rate


Standard Variable Rate

ANZ Online Saver

Maximum Variable Rate


Standard Variable Rate

RaboDirect High Interest Savings Account

Maximum Variable Rate


Standard Variable Rate


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