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|High interest savings||Maximum variable rate (p.a.)||Standard variable rate (p.a.)|
|RaboDirect High Interest Savings Account||3.05% 4 months||2.00%|
|RAMS Saver Account||3.15% Ongoing, deposit at least 200||1.50%|
|UBank USaver||1.81% Ongoing, conditions apply||1.81%|
|St.George Maxi Saver||3.00% 3 months||1.05%|
|ME Online Savings Account||3.05% Ongoing, conditions apply||1.30%|
|Citibank Online Saver||3.00% 4 months||1.70%|
|ANZ Online Saver||2.85% 6 months||1.25%|
What’s the best account for my savings style?
|Product type||Savings style||What’s the catch?|
|Introductory offer||You’re just beginning to save or want to "set and forget" your savings||You only receive the bonus rate for the first couple of months (usually up to four)|
|Bonus saver||You regularly put money away or you’re saving towards a goal, like a house deposit or car||You need to make ongoing deposits and usually no withdrawals to get the bonus rate|
A savings account (sometimes also known as a bank account) are accounts maintained by a bank that pays an interest rate. The account lets you store your money in secure location, while earning a return. Savings accounts usually don’t come with a debit card, this feature is more common with everyday transaction accounts. They also don’t appear on your credit file and you can open as many as you want.
The interest rate on your savings account
The interest rate your savings account usually moves in line with the Reserve Bank of Australia (RBA) cash rate. This can be both good and bad. When rates are higher, then you get more of a return on your investment, and vice versa. So if you’re ever wondering why the interest rates on all savings accounts are so low, it usually means the RBA cash rate is low. The interest on your account is usually calculated daily and paid on a monthly basis. It also uses compound interest.
How does a savings account work?
Typically an account holder will store their spare cash into a savings account. To encourage account holders to save, banks will award you an interest rate, which is essentially a return on your money. From the Australian Tax Office’s perspective, the interest you earn on your savings account is considered to be income. That means it will be taxed at the highest marginal rate unless you’re able to provide a Tax File Number. Only then you’ll be taxed at the rate you’re supposed to be taxed.
It’s usually pretty easy to access your funds from a savings account. In most cases, you link it to an everyday account. You then transfer your money from your savings account, to your bank account and that allows you to access the funds. Your bank will specify whether you need to link your savings account with a bank account from the same bank.
If you would like to lock away your fund for a period of time, you may want to consider a term deposit instead.
How do I get the bonus interest rate on my savings account?
There are usually a few catches you need to be aware of when trying to get the bonus interest rate on a savings account. You will need to understand the difference between a headline rate and base rate. For an introductory bonus savings account, the bonus interest rate is only awarded for the first couple of months (up to four normally) and you need to be a new customer. That is, a customer that has never had that account before.
For a bonus saver account, the bonus interest is usually awarded when you’re able to deposit a certain amount per month and make no withdrawals. It usually doesn’t matter if you’re a new customer or not, but there may be restrictions on the amount of accounts you can have.
You will also need to be across the balance your bonus rate applies to. In most cases, any balance beyond $250,000 usually earns the standard variable rate. To learn more about these restrictions, select the range that best describes your total balance to compare these types of accounts.
How do I find a savings account for my situation?
|Youth and student||Whether you're studying, doing an apprenticeship or under 18, there are still a range of accounts available for you. Every dollar counts at this stage, so check if you're eligible for a low-cost student account.|
|Saving for a goal||Setting a goal and setting up a savings plan is easier than you think. There are a few ideas that can help, including taking advantage of a sweep facility or locking it away in a term deposit. Also, take note of the interest rate and understand the features you can use.|
|Retired and seniors||Whether you love the convenience of Internet and Phone banking, or prefer face-to-face banking in a branch – financial institutions offer a range of options.|
|Accounts for children||Most parents want to help their kids manage their money responsibly and learning to save is an important skill for the future. Help your child's savings grow by choosing the right account.|
|Moving to Australia||Whether you've moved to Australia for work or study, Australian banks have a wide range of options for you. You'll need an everyday bank account for your everyday banking and most likely a savings account to store any surplus cash.|
How do I compare savings accounts?
Look for high or competitive interest rates
- Your interest rate is your return and reward for keeping your money in the bank. Getting the highest interest rate will mean your money will work harder for you.
You want practically no fees
- Most banks nowadays don’t charge a monthly fee for maintaining a savings account. If you’re currently paying a monthly fee, then you need to assess whether the savings account is worth the free.
It should be easy to access your money
- The level of accessibility to look for depends on your preferences and personal savings goals. While an on call savings account allows you almost instant access, term deposits and notice savers require that you plan ahead for when you are going to want to access your money.
You should be rewarded for constantly saving
- If you find that your savings account balance is building up, but you're still getting a less-than-average rate; then it could be time to switch.
What are the benefits and drawbacks of a savings account?
- Savings accounts are considered to be a safe investment and are usually available at-call. They are also covered under the Government Guarantee.
- They are great tool to help you save and budget.
- They are liquid. It's harder to withdraw from your money from a term deposit, notice saver or share trading account (when it's invested in shares).
- You can use them to save up for your house deposit.
- In come cases you may not be able to access your savings immediately, which can be inconvenient when you need the funds for an emergency.
How to apply for a savings account online
The process involves filling in an online application, verifying 100 points of ID if you’re a new customer and depositing funds into the account to get your savings plan started.
Not an Australian resident? Don’t worry, you can still apply for a savings account if you’re an expat or intend to move to Australia permanently.
What documents do I need for my online application?
The following documents will be handy to have and could speed up your application process:
- Your personal details. Such as your full name, address, phone number and email address.
- Your Tax File Number. This ensures that you get taxed right when earning interest and not at the highest marginal rate.
- Identification. A driver's licence, passport or birth certificate will do.
What are the rules around 100 point identity verification?
You may need to provide 100 points of identification in order to prove your identity when opening a bank account. While this ‘100-point check’ was once a legal requirement in Australia, this is no longer the case under the Anti-Money Laundering and Counter Terrorism Financing Act 2006.
However, many individual banks still require you to provide 100 points of ID before you can open an account. Items such as a passport or birth certificate are worth 70 points, while secondary documents such as driver’s licences are worth 40 points. If you already have an account with the same bank you will not have to satisfy the 100-point check.