High interest savings accounts

High interest savings accounts often offer much better interest rates than regular savings accounts. You'll usually have to meet a few simple account conditions to earn the higher interest rate, such as depositing money regularly or limiting your withdrawals. Take a look at some high interest savings accounts in the table below, and the conditions attached to find one that works for you.

High interest savings accounts on Finder

• How to use the table

  Use our table below to figure out which high interest savings account will suit you - here's how:

  1. Put in your starting deposit amount
  2. Put in the amount you plan to deposit each month
  3. Input how long you plan to save for (this is the "period")
  4. Then just click "Calculate"

  When you've picked an account, hit the green 'Go to site' button to be taken to the bank's site to begin your free online application.

Initial Deposit

$

Monthly Deposit

$

Period

months

Calculate

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Name	Product	Maximum Variable Rate p.a.	Standard Variable Rate p.a.	Bonus Interest p.a.	Fees	Interest Earned	Product Description
Westpac Life (18-29 year olds only)		3.00%	0.40%	2.60%	$0		Customers aged 18-29 can earn an ongoing, variable 3.00% p.a. on balances up to $30000 each month you grow your balance and make 5+ debit card purchases from your linked Westpac Choice transaction account.	Go to site More	Compare	loading Fetching your data...
MyState Bank Bonus Saver Account		1.50%	0.15%	1.35%	$0		Ongoing, variable 1.50% p.a. when you deposit at least $20 into the account each month and make five or more Visa Debit card transactions from a linked MyState transaction account. Bonus interest available on balances up to $250,000.	Go to site More	Compare	loading Fetching your data...
Bankwest Hero Saver		1.15%	0.01%	1.14%	$0		Ongoing, variable 1.15% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.	Go to site More	Compare	loading Fetching your data...
Westpac Life		0.75%	0.40%	0.35%	$0		Ongoing, variable 0.75% p.a. each month you deposit money, and make sure your balance is higher at the end of the month than it was at the beginning. No monthly account-keeping fee.	Go to site More	Compare	loading Fetching your data...

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What is a high interest savings account?

What exactly is a high interest savings account? As the name suggests, it's basically a savings account that pays a high interest rate. Because it offers a higher interest rate than a typical savings account, there are usually a few conditions to meet to earn the high rate. For example you might be required to meet a minimum monthly deposit condition, 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.

Promoted

Savings account offer: Westpac Life (18-29 year olds only)

You can earn an ongoing, variable 3% p.a. each month you grow your balance (excluding interest earned) and make 5+ debit card purchases from your linked Westpac Choice transaction account. The maximum variable rate of 3% p.a. is available on balances up to $30,000 for customers aged 18-29.

Go to site

How does a high interest savings account work?

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

How you access your savings

You generally link a high interest 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 high interest 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.

How you earn interest

High interest savings accounts 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 change to earn extra interest each month. A standard savings account, in comparison, will usually just offer the standard base interest rate only with no option to earn extra interest.

The money in your high interest savings 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.

What conditions you need to meet

As we said earlier, in exchange for a high interest rate on your savings there's usually a few account conditions you need to meet. This varies from bank to bank, however it often requires you to deposit a set amount of money each month and open an everyday bank account with the same bank. Some high interest savings accounts also require you to make a certain number of purchases from your linked everyday bank account each month, too.

Take a look at some popular high interest savings accounts and their account conditions to earn the bonus interest in the table below.

High interest savings account conditions to meet

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 savings 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 high interest savings 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 savings 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.

High interest 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.

Tips and traps of a high interest savings account

Here are some tips to help you choose the right high interest savings 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 accounts again after this period.
• The account conditions might be too difficult to meet. You can't look at the interest rate without considering the account conditions. Some high interest savings accounts will require you to deposit $2000 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 a high interest savings 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:

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

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

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