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Australian savings account round-up

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Where's the best place to put your money?

"Plant your savings and watch them grow", my mother used to say. This may have been possible when the RBA cash rate was higher through the 1990s and 2000s, but with the current rate stuck at 1.5%, it can be increasingly difficult to attain any significant growth from your savings. However, you can still get a healthy return if you know where to look. In this blog, I'll look at the real-life returns of various savings account products across Australia.

Basic savings accounts

While many of the big banks offer moderately attractive rates to new customers, the big numbers often only last for a few months, after which interest rates drop dramatically. For example, the best of the basic savings accounts across the Big Four is CBA's NetBank Saver, which offers a robust 2.55% for the first five months. However, after that period the rate drops to a measly 0.5%.

If you dropped $5,000 into this account and then saved a further $200 per month over 2 years (to a total of $9,800), you'd earn only $120 in interest. The equivalent products from the other big banks and their returns are shown below. None is particularly impressive. If your money is earning only half a percent interest annually, it can probably be working harder for you. Thankfully, all of the big banks offer better rates elsewhere.

BankIntroductory rateIntroductory periodOngoing rate2-year $9.8k investment return
Commonwealth Bank NetBank Saver2.55%5 months0.5%$120
Westpac eSaver2.51%5 months0.5%$119
NAB iSaver2.55%4 months0.5%$110
ANZ Online Saver2.3%3 months0.5%$97

Term deposits

Term deposits are a traditional product designed for longer-term saving. They tend to be more attractive when interest rates are higher and offer guaranteed rates over a set term. Once your money is deposited, it is locked in for the full term. Due to the locked-in nature of term deposits and the inability to make monthly deposits, I won't be comparing term deposit returns to the other products discussed. However, for those who are curious, the two-year term deposit rates for the Big Four banks are listed below.

24-month term deposit rate
Commonwealth Bank2.3%

Withdrawal-restricted goal-based savings accounts

All of the Big Four banks also offer goal-based savings accounts. These provide a higher rate of interest ongoing, as long as you fulfil two conditions: make some sort of deposit every month and, in most cases, don't make any withdrawals. The exception here is Westpac, which allows you to make withdrawals as long as your balance at the end of the month is still higher than it was at the start. NAB offers the best deal here, with its 2.5% bonus rate resulting in a much more substantial $373 return for the same investment.

Bonus rateMinimum monthly investment required2-year $9.8k investment return
NAB Reward Saver2.5%$1, no withdrawals$373
ANZ Progress Saver2.4%$10, no withdrawals$358
Westpac Life2.3%$1, increasing month-on-month balance$342
Commonwealth Bank Goal Saver1.65%$200, no withdrawals$244

However, the drawbacks here are obvious. Not being able to make any withdrawals means that if you do dip into your savings, the interest drops dramatically (to 0.01% in some cases). For those looking for a flexible savings option, these conditions may be too restrictive. Fortunately, there are a handful of online-only banks offering an alternative solution.

Criteria-based savings accounts

ING, ME, AMP and UBank all offer similar ongoing bonus interest rates which have slightly less restrictive conditions. In general, if you also open a transaction account and do your day-to-day banking (depositing wages, debit card spending) with these banks, that's sufficient to unlock the high rates. There are no specific investment requirements here – once your wages are deposited, you are free to withdraw them or otherwise use them as you see fit. UBank offers the best rate of the four, with a chunky $429 return on our $9,800 2-year investment.

Bonus rateMonthly banking requirement2-year $9.8k investment return
U Bank Savings + Transaction Accounts2.87%$200 paid into savings or transaction account$429
ME Bank Online Savings + Everyday Transaction Accounts2.85%Make 1 debit card purchase per week$419
ING Savings Maximiser + Orange Everyday Accounts2.8%$1,000 paid into transaction account. Make 5 debit card purchases.$412
AMP Bett3r Save + Bett3r Pay Accounts2.25%$2,000 paid into transaction account.$335

Graham Cooke's Insights Blog examines issues affecting the Australian consumer. It appears regularly on

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4 Responses

    Default Gravatar
    JennyApril 25, 2019

    If I invested $120,000 over a 12 month period in a NAB term deposit how much would my monthly interest be?

      MaiApril 26, 2019Finder

      Hi Jenny,

      Thank you for reaching out.

      As of this writing, the interest rate of a 12-month NAB term deposit is 2.20%. Please find below estimated interest based on how the interest rate is compounded if you will deposit $120,000 for 12 months.

      Interest is compounded annually $2,640.00
      Interest is compounded monthly $2,666.78
      Interest is compounded daily $2,669.17

      You can also check our term deposit calculator should you wish to check the estimated interest of other term deposits.

      Hope this helps! 😊

      Kind Regards,

    Default Gravatar
    SophieNovember 28, 2018

    If I invested $30000 in a NAB Term deposit over 5 years what would my monthly interest be?

      JhezelynDecember 2, 2018Finder

      Hello Sophie,

      Thank you for your comment.

      According to our review on the NAB term deposit, the interest rate for 60 months term is 2.80%. If you’re going to use the term deposit calculator, the result would be:

      Total interest is compounded annually: $4,441.88
      Total interest is compounded monthly: $4,502.59
      Total interest is compounded daily: $4,508.03

      Please be advised that the rates and calculations are the rates at the time of publication, hence, an indication only. You should check with NAB directly so they can provide you calculations based on real-time rates.

      Should you wish to have real-time answers to your questions, try our chatbox on the lower right corner of our page.


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