No matter how you’ve come about $100,000 or more, whether through the sale of a home or through prolonged savings or simply by a stroke of good luck, you can think about opening an account that offers a competitive interest rate. You’ll be able to use the interest as an income stream.
Financial institutions like banks and credit unions offer different types of savings accounts, which offer varied degrees of flexibility, and these include high interest savings accounts. Some of these accounts offer tiered interest rates, where the maximum interest rate applies on balances in excess of $100,000.
Features of such accounts can vary considerably. Some such accounts have minimum opening balance requirements and some require you to maintain a minimum ongoing balance. If your account comes with a tiered interest rate system, you’ll earn lower interest if the balance in your account drops below $100,000. Some savings accounts offer introductory bonus rates and some let you earn bonus interest if you meet certain deposit and withdrawal requirements.
When you’re comparing savings accounts for balances over $100,000, pay attention to the following features:
Interest rate. Financial institutions provide savings accounts with different interest rates, and you can even find accounts offered by the same institution with different rates. While a difference in interest rate percentage might not seem like much, know that it can have a significant effect on the dollar value, especially if you plan to keep a sum as large as $100,000 in the account for a considerable time period.
Bonus interest. You can find savings accounts that come with promotional interest rate offers, where a bonus rate applies on balances for an initial period. Some accounts also let you earn bonus interest if you meet certain deposit and withdrawal conditions. For example, you may be able to earn bonus interest if you make at least one deposit and no withdrawals in a month.
Access to funds. Finding out how you can access money in your account becomes important if you might need some of it from time to time. Most savings accounts let you access your money via Internet and phone banking, and some let you pay bills using BPAY. If you can afford to put some money away for a given time period, you can even consider opening a term deposit.
Calculation and payment of interest. The best savings accounts are ones that calculate interest everyday and make monthly payouts. You should try to limit your search to accounts that offer monthly interest payouts, and ones that pay interest on the entire balance.
Fees and penalties. If an account you narrow down on charges an account opening fee or an ongoing account keeping fee, you may want to reconsider your options. If you’re opening a term deposit, know that you may have to pay a penalty if you want to access funds in your account before the term expires.
What are the pros and cons to putting $100,000 in a savings account?
Pros
High interest. When you open a savings account where the maximum rate applies over $100,000 you stand to earn the highest interest possible. Even if the account balance is below $100,000 you’ll still continue to earn interest.
Little risk. A savings account offers peace of mind, and you can rest easy knowing that your money is not going anywhere. This asset class is a much safer investment bet when compared to investing in real estate or shares. Besides, the Australian Government Guarantee Scheme protects balances of up to $250,000, per individual per financial institution.
Flexibility. If you open a savings account, you can access the money in your account at just about any time of the day or night. If you’re opening a term deposit you typically get to choose from terms in between three months and five years.
Access toBPAY. If you want to use your account to pay bills, you can look for one that gives you access to BPAY. This way, you don’t have to transfer money into your everyday account to pay bills.
Cons
Restrictions. If an account lets you earn bonus interest, you may have to meet certain criteria. If your savings are a part of your investment funds, you may not be able to access the money as quickly as you like, which can also be the case with a term deposit. If you wish to withdraw funds from a term deposit before its maturity, you may have to pay a penalty.
What are the risks?
In case you’re opening a savings account, take time to establish how much interest your money will earn if your account balance drops below the $100,000 mark. This can be particularly important if you think that the balance won’t remain over $100,000 for much time.
When opening a term deposit, picking the right term plays a vital role. If you go with a short term, you may not be able to benefit from an equally good rate when time comes to rollover the deposit. If you end up picking a term long and withdraw funds before maturity, the penalty you have to pay could end up negating the benefits of a higher interest rate.
Frequently asked questions
Yes, they would, because the $250,000 cumulative limit applies to each financial institution you deal with, and there is no limit to the number of institutions you can bank with.
Yes. You should mention any interest earned through savings accounts on your tax forms, and you can simplify matters by giving your tax file number to your financial institution.
Yes, this is possible, but it may not necessarily apply to all savings accounts.
Shirley Liu is Finder's global program manager. She was previously the publisher for banking and investments and has also written comparisons for energy, money transfers, Uber Eats and many other topics. Shirley has a Master of Commerce and a Bachelor of Media, Journalism and Communications from the University of New South Wales. She is passionate about helping people find the best deal for their needs. See full bio
The Australian Unity Freedom Saver account lets you earn a competitive rate on balances between $50,000 and $250,000. Learn more about this high interest savings account.
The Australian Unity Freedom Saver account lets you earn a competitive rate on balances between $250,001 and $500,000. Learn more about this high interest savings account.
The Virgin Money Boost savings account (for 18-24 year olds) offers bonus interest each month you deposit money and meet the purchase requirements. Here's how the account works and how to apply.
The Virgin Money Boost savings account (for 25+ year olds) offers bonus interest each month you deposit money and meet the purchase requirements. Here's how the account works and how to apply.
Available to SMSFs, the Rabobank Notice Saver offers a high interest rate on your savings, but you’ll need to give at least one-month’s notice before you can withdraw your funds.
Please click the name of your preferred account to know more details and you may select the green “Go to site” button to submit an online application through their official site.
Before you use any financial product, please read through its terms, conditions, and features to see if they are the right choice or not.
I hope this helps, Lucy.
Best regards,
Rench
Feedback
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
I have $100000 to invest for six months
Hi Lucy,
Thanks for reaching out to us.
Aside from the savings accounts featured on this page, you may also want to consider opening term deposits with $100,000 deposit.
Please click the name of your preferred account to know more details and you may select the green “Go to site” button to submit an online application through their official site.
Before you use any financial product, please read through its terms, conditions, and features to see if they are the right choice or not.
I hope this helps, Lucy.
Best regards,
Rench