Money hack: Earn more interest on your savings for short-term goals
If you're saving for a goal that is only three or four months away, here's how to give your money a bit of a boost.
If you're saving for something like a house deposit, chances are you'll be working on that savings goal for several years. However, not all savings goals are long term. Sometimes you're trying to save for something that's only a few months away.
For example, maybe you're going on a holiday in four months time and you want your savings to earn as much interest as possible before you jet off. Whatever you're saving for, there are savings accounts that can help you achieve your short-term savings goals, you just need to know what you're looking for!
Bonus savers, for example, encourage you to save regularly by rewarding you with additional bonus interest each month you deposit money into the account. You could earn over 2.60% p.a. on your balance with a bonus saver account each month you meet the ongoing deposit conditions.
But if you want to make your money work harder for you for just a few months, you could earn over 3.00% p.a. with an incentive saver account.
An incentive saver offers a higher rate of interest than a standard bonus saver, but it's only for a short period of time. For example, RaboDirect's High Interest Savings Account offers 3.05% p.a. interest on balances up to $250,000. The catch is that the high rate of 3.05% p.a. is only available for the first four months after opening the account, but if you've got a short-term savings goal this could suit you just fine. This hack is especially useful if you've already got a large savings balance that you can deposit.
Incentive savers are for new customers only, so you can't keep opening new accounts with the same bank every four months. However, what you can do is move your money into a different incentive saver account with another bank and enjoy the high interest rate for another three to four months. Yes, hopping between accounts every few months will be a bit of admin, but it's worth it to earn more interest on your money.
Finder Money Hacks is a weekly round-up of the latest tips and tricks to help improve your finances. Check back every Saturday for new hacks.
- Xinja is closing down, what does this mean for customers?
- Tips for parents as school banking programs to be banned in Victoria
- Revolut launches in Australia: How does it compare to rival neobanks and fintechs?
- Here’s why Australians are flocking to the new digital banks
- Big Four banks announce bushfire relief packages