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High interest savings accounts

A high interest savings account is like a regular savings account, but better. You get the chance to earn more interest on your savings each month by meeting a few account conditions.

PROMOTED
MyState Bank Bonus Saver Account
  • Max rate: 1.6%
  • Base rate: 0.05%
  • Ongoing rate
  • Max rate: 1.6%
  • Base rate: 0.05%
  • Ongoing rate
Monthly max rate conditions:
  • Deposit $20
  • 5 debit card purchases
Monthly max rate conditions: Deposit $20, 5 debit card purchases
Eligibility criteria, terms and conditions apply.

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Savings accounts with high interest rates

These accounts offer a higher interest rate when you meet a couple of account conditions, such as making regular deposits. Use our table to compare some of the best high interest savings accounts in the market right now.

Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Intro Period Government Guarantee Monthly Max Rate Conditions
Bank of Queensland Smart Saver Account - 36+ years
Bank of Queensland Smart Saver Account - 36+ years
2.00%
0.05%
Ongoing
  • Deposit $1,000
  • 5 eligible purchases
Deposit $1,000 , 5 eligible purchases.
MyState Bank Bonus Saver Account
MyState Bank Bonus Saver Account
1.60%
0.05%
Ongoing
  • Deposit $20
  • 5 debit card purchases
Deposit $20, 5 debit card purchases.
Bank of Queensland Future Saver Account - 14 to 35 years
Bank of Queensland Future Saver Account - 14 to 35 years
3.00%
0.05%
Ongoing
  • Deposit $1,000
  • 5 eligible transactions
Deposit $1,000, 5 eligible transactions.
Rabobank High Interest Savings Account
Rabobank High Interest Savings Account
2.10%
1%
4 months
  • N/A
N/A.
Commonwealth Bank NetBank Saver
Commonwealth Bank NetBank Saver
0.50%
0.3%
5 months
  • N/A
N/A.
NAB iSaver
NAB iSaver
0.80%
0.3%
4 months
  • N/A
N/A.
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What is a high interest savings account?

It's a savings account that pays a higher interest rate than a standard account. Because these accounts offer a higher interest rate, there are usually a few conditions to meet to earn it. For example, you might be required to deposit a minimum amount each month or limit your withdrawals from the account. A regular savings account, in comparison, will offer a lower interest rate on your balance each month, but there usually won't be account conditions to meet.

Over the last few years savings rates have been at all-time lows, driven by a historically-low cash rate. The RBA's official cash rate has been at just 0.10% for the past 2 years, which resulted in ultra-low home loan rates and, in turn, low savings rates too. However the cash rate was recently lifted to 0.35% in May and again in June by 0.5%, and we've already seen many savings accounts increase their rates as a result. Savings rates are still quite low, but they're definitley on the way up.

Standard variable rate vs maximum bonus rate

You'll notice a few different rates when you compare accounts, here's what they mean:

  • Standard or base rate.This is the minimum rate you'll earn on the account when none of the conditions are met.
  • Bonus rate.This is the extra rate you'll earn on top of the standard rate when you meet the account's bonus conditions (e.g.: monthly deposit).
  • Maximum or total rate.This is the standard rate plus the bonus rate, and the total interest rate you'll earn when all account conditions are met (this is what you want to be high!).
  • Introductory rate.Some accounts offer a special intro rate for a short period, usually 3-5 months, after opening the account. This rate will drop down to the standard rate after the intro period is over.
  • Benefits of a high interest savings account

    • A higher interest rate helps your savings grow faster.

    Compared to an everyday transaction account, which usually pays no interest, and a standard savings account, which won't pay much interest, a high interest account can help you grow your savings faster.

    • Your money is safe.

    Your savings are protected by the Australian government under the government guarantee scheme. Most banks and financial institutions are included in the scheme, which means eligible deposits are insured up to $250,000 per person, per institution.

    • You can access the money at any time.

    The money in your account is your money, and it's readily and easily available whenever you need it. Unlike a term deposit, which locks your funds away, you can move the money from your high interest account into your everyday bank account to spend it within seconds of needing it.

    • It's a good incentive to save.

    Because you often need to deposit money regularly in order to earn the high interest rate, these accounts are a great incentive to save money. They can also be a good motivation to keep your money in the account earning interest rather than spending it on day-to-day items and impulse purchases.

    • There are no fees.

    Savings accounts don't charge any account-keeping fees, and there are no fees to add money into or move money out of the account.

    Benefits of a high interest savings account

    How to compare high interest savings accounts

    There's more to consider than just the high interest rate. Think about the following when you compare accounts:

    • Is the interest rate competitive?
    • Can I meet the monthly deposit requirement every month without putting myself into financial stress? If you can't, consider an account with a smaller monthly deposit condition.
    • Is it important to me that I keep my existing everyday bank account? If yes, consider a savings account with that same bank.
    • Is the high rate for an introductory period only (e.g. for the first 4-5 months)? If it is, will I be happy to change accounts again after this?
    • Am I able to make withdrawals from the account if I need to without losing my interest that month?
    Alison Banney

    🔥 Quick tip when picking a savings account

    Alison Banney, Finder's banking editor

    "A high rate is important, but it's not the only thing to consider. The savings rate on my own account isn't the highest in market, but it has monthly deposit conditions I can easily meet and is linked to an everyday bank account with the same bank, which I find really helpful. If you can't meet the account conditions each month there's little point opening the account, because you won't earn the high rate anyway."


    Which bank offers the highest savings rate?

    Currently the highest rate you can get is 3% with a Bank of Queensland Future Saver Account. This is a great rate, but it does have some limitations. Firstly, it's only available for customers aged 14-35 and on balances under $50,000 (most accounts without age restrictions will pay interest on much larger balances up to $250,000 or more). You also need to open a bank account with the same bank and deposit at least $1,000 a month.

    If this account doesn't suit you or you're not eligible, here are another 5 top savings rates.

    Top 5 high interest savings accounts

    AccountTotal interest rate p.a.
    Westpac Life Account2.5% p.a.
    Great Southern Bank Youth eSaver3.25% p.a.
    ING Savings Maximiser2.1% p.a.
    Rabobank High Interest Savings Account2.1% p.a.
    Virgin Money Boost Saver Account2% p.a.

    How do high interest savings accounts work?

    Here's how you access your money, how interest is applied and the conditions you might need to meet.

    How is interest earned?

    Savings accounts with a higher interest rate will offer a bonus interest rate on top of the base interest rate each month that you meet the account conditions. This gives you the chance to earn extra interest each month. A standard savings account, in comparison, will usually only offer the standard base interest rate with no option to earn extra interest.

    Compound interest

    The money in your account benefits from compound interest that is calculated daily and paid monthly. Compound interest allows you to earn interest on your interest, helping your money grow quicker.

    For example, let's say your balance was $10,000 and you earned $100 in interest during the month. The following month, interest would be calculated on your full balance of $10,100 (that's your original balance plus the interest earned last month), so you'd earn even more interest the second month. So technically, you don't even need to deposit money regularly for your savings balance to grow.

    Accessing your savings

    You generally link a savings account to your everyday bank account, usually with the same bank. This allows you to easily move money back and forth from your savings account to your everyday bank account when needed. This is handy, as savings accounts don't come with a debit card to access your money (but bank accounts do). Although you can't spend the money in your savings account using a debit card, you can still access it almost instantly by transferring it to your bank account and spending the money from there.

    Conditions to meet

    As we said earlier, in exchange for a high interest rate on your savings there are usually a few account conditions you need to meet. This varies from bank to bank, but most accounts require you to regularly deposit money and keep growing your balance (which is a good thing if you're trying to save!).

    High interest accounts usually require you to meet one or several of these conditions:

    • Open an everyday bank account with the same bank and link your high interest savings account to it
    • Deposit a set amount of money each month, from as little as $20 with the MyState Bank Bonus Saver Account or as much as $2,000 with the Virgin Money Boost Saver account.
    • Make a certain number of transactions each month from the linked bank account (usually 4-5 transactions per month)
    • Grow you balance each month
    • Limit your withdrawals or make no withdrawals at all

    Some accounts will ask you to met just one condition, while others will ask you to meet a few.

    Variable interest rates

    Savings accounts all offer variable interest rates. Similar to a variable rate home loan, a variable savings rate means it can change at any time, if the bank decides to do so. The opposite of a variable rate is a fixed rate, which is offered on term deposits. A fixed rate doesn't change and is locked in for a set period of time.

    During 2020 and 2021 most banks dropped their savings rates, as the official cash rate was so low. Since the RBA has lifted the official cash rate in May, we've started to see banks raise their savings rates.

    Fees and charges

    These accounts typically have no account-keeping fees and no regular charges. The account is designed to help you save money, not get eaten away by fees. However, in order to access the money, you'll need to link the account to an everyday spending or transaction account, which might have fees and charges.

    Is your money safe?

    A savings account is one of the safest places to keep your cash. This is because the money in account with an Australian bank is protected by the Government's bank guarantee scheme. Under this scheme, your deposit up to $250,000 is guaranteed by the Government, even if something were to happen to the bank.

    Another reason why these accounts are so safe is because your balance will never go backwards if you don't make withdrawals. Unlike investing in shares which could see you lose money if the share price falls, the money in your savings account can't fall or go down unless you decide to spend it.

    High interest savings accounts vs standard savings accounts

    High interest savings accounts offer better interest rates, but with more conditions attached. If you're looking for a set-and-forget option without having to meet any ongoing conditions, a standard savings account still offers some level of interest but without any effort on your end.

    Let's take a look at some high interest savings accounts and regular savings accounts from the same bank, so you can see the difference.

    BankHigh interest savings accountStandard savings account
    WestpacWestpac Life (under 30s): 2.5% p.a. when you link to a Westpac Choice account, grow your balance each month, keep your balance above $0 and make 5+ transactions/month.Westpac eSaver: 0.75% p.a. for the first 5 months with no conditions to meet.
    Virgin MoneyVirgin Money Boost account (25+ year olds):2% p.a. when you link to a Virgin Money Go Transaction Account, deposit $2,000/month and make 5+ transactions/month.Virgin Money Grow Saver: 1.5% p.a. each month you make at least 1 deposit and make no more than 1 withdrawal.
    INGING Savings Maximiser: 2.1% p.a. when you link to an ING Orange Everyday account, deposit $1,000/month, make 5+ purchases/month and grow balance.ING Savings Accelerator: Up to 1.2% p.a. on large balances, with no conditions to meet.

    Tips and traps

    Here are some tips to help you choose the right account for you and some traps to avoid.

    Tips

    • Make sure you're comfortable with the account conditions. If you can't realistically meet the account conditions each month, you won't earn the high interest rate so it defeats the purpose of opening that account.
    • Switch accounts constantly. To ensure you are always earning the highest rate, you could continually switch savings accounts after the introductory period ends.
    • Compare accounts regularly. Unlike some other financial products, savings accounts are constantly changing their rates. This means you might have the highest rate one month but not necessarily the next.
    • Look at the variable base rate too. Don't just look at the headline rate – the variable base rate is what you'll earn if you can't meet the account conditions one month, so make sure to check what this rate is too.

    Traps

    • Introductory offers are for limited times. If you open an account that offers a high introductory rate for a few months, don't forget that this rate will drop after the introductory period ends. It's a good idea to set yourself a reminder to compare savings accounts again after this period.
    • The account conditions might be too difficult to meet. To find the best savings account, you can't look at the interest rate without considering the account conditions. Some accounts will require you to deposit $2,000 or more each month to earn the high rate, which may be difficult to meet if you're a casual worker, you work part time or you're in the gig economy.
    • The linked transaction account might have fees. High interest savings accounts will often require you to also open a transaction account with the same bank, and this account might come with fees and charges.

    How do I apply for a high interest savings account?

    You can open an account online in a matter of minutes. It's free and easy to do and requires little effort or paperwork. Once you’ve clicked through to the bank's secure application page, you will typically need to provide the following:

    • Your personal details such as full name and contact information
    • Your tax file number
    • Documents to verify your identity and age, like your driver's licence or passport

    Once you've finished the application form and the bank has verified your identity, your account will be opened and you'll be able to start transferring money into it and earning interest.

    FAQs on high interest savings accounts

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