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:
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.
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Here's where you can get a decent return on your hard-earned cash.
Read more…Earn a competitive interest rate on terms between 1 month and 2 years with a Challenger term deposit.
This account offers fixed interest rates for terms ranging from one month to five years, so you can enjoy secure, guaranteed returns on your business funds.
With competitive interest rates and terms ranging from 3 to 24 months, a MOVE Bank Term Deposit can help you reach your financial goals.
Passively watch as your money grows in a high interest earning term deposit from BankVic
A variety of terms to choose from along with interest payment options make the P&N Bank Term Deposits worth a closer look.
Take control of your super with a flexible account that allows you to manage all of your needs in one convenient place.
Give your money the benefit of a high interest savings account boost with a flexible term deposit that allows you to structure the terms to meet your needs.
You can grow your savings quickly and easily by locking them into a term deposit from Rural Bank.
With its relatively low opening balance, IMB’s term deposit could make it easy for Australians to begin making a positive investment towards their financial future.
Bendigo Bank term deposits can give you easy means to save for a short or long term goal. Though, you can find other similar offerings out there, so compare a few before deciding.
