Locked savings accounts
Need to lock yourself out of your own savings? A locked savings account could include a term deposit or a savings account with restrictions on withdrawals.
Savings accounts with restrictions
These accounts offer extra interest each month you save money and make no (or limited) withdrawals.Compare other products
How we picked these
How the Finder Score helps you find a better savings account
The Finder Score is a simple score out of 10. The higher a savings account's score, the better we think it is for the average customer.
We score each savings account in our database of hundreds based on a data-driven methodology with 2 main criteria: Does the account offer a high interest rate? And is it easy for savers to actually earn that rate?
Key takeaways
- Locked savings accounts encourage saving by offering higher interest for meeting specific conditions.
- Term deposits fix your interest for a set period like 12 months offering up to 5.05% p.a.
- Understand withdrawal limits or penalties to ensure your chosen account suits your access needs.
How do savings accounts you can't touch work?
Savings accounts with restrictions are called bonus saver accounts. They offer a higher interest rate each month you make limited or no withdrawals, make regular deposits and /or grow your balance. This creates an 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 one or a combination of the below:
- Depositing a specific minimum amount into your account each month.
- Making a minimum number of deposits each month.
- Making no or limited withdrawals each month.
- Maintaining a minimum account balance or growing your balance each month.
What happens when I withdraw from my savings account?
If you don't meet the conditions of the savings account, you'll earn a much lower interest rate on your balance for that month. This could be as low as 0.01% p.a! The threat of a really low interest rate could be enough motivation for you to keep your savings balance untouched.
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.
Our expert says
"Some savings accounts state your balance has to grow each month to earn bonus interest. This means you're allowed to make withdrawals throughout the month, but you need to replace the money (plus a bit extra) before the end of the month. So even though you can make withdrawals, it's a good idea to restrict them because it might be difficult to replace the money by the time the month is coming to an end."
How to compare savings accounts you can't touch
- Check the maximum interest rate you can earn on each account. Remember that you will only earn this high rate if you satisfy all the account terms and conditions each month, so check out the base interest rate that will apply if you miss a deposit or make too many withdrawals.
- Check if there are deposit requirements. Is there a minimum amount you need to deposit each month in order to receive the best rate? Also check to see whether there is a minimum deposit required to open an account.
- Check if there are limits on the number of withdrawals you can make. Many accounts will limit the number of withdrawals you can make each month and this limit could possibly be as low as zero. If you fail to meet this requirement, you won’t earn any bonus interest for that month.
- Linked account requirements. Some banks will require you to also open a linked transaction account with them in order to open a bonus saver account. If this is the case, make sure the transaction account is suited to your needs and doesn’t have any hidden fees.
- Check for any hidden account fees. Exorbitant bank fees can quickly defeat the purpose of any bonus interest earned on an account, so read the fine print to make sure you’re aware of any ongoing fees, withdrawal fees and other transaction charges.
- How accessible is your cash? Check to see whether your account can only be managed online or whether you also have branch, mobile banking and phone banking access. Easy accessibility to customer service and support is another important factor.
Finder survey: How long are Australians holding term deposits?
| 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% |
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
Locked term deposits
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How we picked these
Finder Score for term deposits
Finder Score assigns Term Deposit products a score out of 10, comparing interest rates and features, to make comparison easier. We assess over 150 products from more than 90 providers, assessing products across different terms to determine an average score per product.
How do term deposits you can't withdraw from work?
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 don't trust yourself to not dip into your savings account for impulse purchases, a term deposit might be a better fit as these accounts are actually locked.
If you do need to make a withdrawal, you'll need to give 31 days' notice and pay a penalty (usually this is in the form of lost interest). 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.
Benefits of locking your money in a term deposit
There are a couple of key benefits to term deposits. First, you get the security of a fixed interest rate for the term. Your deposit is also covered by the Financial Claims Scheme, which guarantees deposits up to $250,000 per account holder per ADI banking licence, not per brand, so amounts above that limit aren't guaranteed. 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.
How to compare term deposits you can't touch
Consider the following features when comparing the pros and cons of term deposit accounts:
- The fixed interest rate. As the table above shows, interest rates can vary greatly between banks and depending on the term you choose. Look around for the best interest rate you can find – but make sure there are no unexpected fees attached.
- When interest is calculated. Check to see whether interest is calculated on the account daily, monthly, quarterly or yearly. The more often interest is calculated, the more your balance will grow as you'll earn interest on your interest.
- Compare the terms and conditions. When comparing accounts, make sure you evaluate the features of accounts with the same term length. For example, only compare six month term deposits with other six month term deposits. If your bank doesn’t offer the term you want, look elsewhere.
- Check the fees for early withdrawal. It’s worth checking what sort of fee you will incur if you need to withdraw your money before the term ends.
- Check where interest is paid on maturity. Is the interest you earn paid back into the same account or into a different account? Do you need to open a linked account with the same financial institution to receive interest payments?
- Are there loyalty bonuses? If you want to re-invest your money into another term deposit after your first deposit matures, will you be rewarded for your loyalty with a bonus interest rate?
FAQs
Karen Eley is the founder of Women Talking Finance, which provides money coaching and financial literacy and education services. An experienced and former financial adviser who has worked in financial services industry for 22 years, Karen is a Certified Money Coach (CMC), holds a Bachelor of Accounting and an Advanced Diploma in Financial Planning and CFP.
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I’m looking for a high interest account given on daily balances, that allows withdrawals (a few at least), that doesn’t decrease substantially after an introductory offer expires.
I.e from a 4.5% down to 1% (for example).
And with only minimum deposit per month.
Is there an account that exists like that?
Hi Karen,
There are some accounts that meet your requirements. Suncorp’s Growth Saver Account allows withdrawals, doesn’t have many conditions and the rate is ongoing. BOQ’s Simple Saver Account is similar, and doesn’t require you to make regular deposits in order to get the maximum rate.