Online savings accounts

An online savings account is an account that you manage via Internet banking or a mobile banking app, rather than at a bank branch. You can access your account online at any hour of the day, and when you're out-and-about. Online savings account rates are often better than other accounts, too.

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Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Intro Period Government Guarantee
AMP Saver Account - 1.35% from 1 Feb 2022
1.35%
0.1%
Ongoing
Virgin Money Boost Saver (25+ year olds)
1.2%
0.1%
Ongoing
Westpac Life (18-29 year olds only)
2.5%
0.15%
Ongoing
MyState Bank Bonus Saver Account
1.1%
0.05%
Ongoing
Great Southern Bank Home Saver Account
0.95%
0.05%
Ongoing
Virgin Money Boost Saver (18-24 year olds)
1.2%
0.1%
Ongoing
Citibank Online Saver
1.1%
0.35%
4 months
Virgin Money Grow Saver
0.65%
0.1%
Ongoing
Westpac Life
0.25%
0.15%
Ongoing
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What is an online savings account?

An online savings account is an account that you can completely manage online, without the need to go into a bank branch or physical store. You can access your savings balance via Internet banking or the mobile banking app provided by the financial institution. Online savings account interest rates are often better and they usually charge no fees, because there are less overheads involved. Plus, you get the flexibility of the internet, so you can access your money 24/7.

Generally speaking, the best online savings account for you is one with a great interest rate, monthly account conditions you can meet and a mobile app or Internet banking platform that has the features you're looking for.

How do online savings accounts work?

You first need to ensure that you have an active bank account (an everyday transaction account) that can be used as a linked account for transferring funds into, and out of, your savings account. This is because most online savings accounts do not come with a debit card, therefore the only way to access your money is by transferring it to your transaction account where you can then access via EFTPOS or withdraw the cash from an ATM. Once your transaction and savings accounts are both set up, linking them simply involves logging in to your internet or mobile banking app and initiating a transfer between accounts.

Online accounts usually don't attract any transfer fees or monthly account-keeping fees, so they offer an inexpensive way to build savings. However, you might be charged account keeping fees on your linked transaction account so be sure to watch out for this. Interest on the balance is calculated daily, and deposited into the account at the beginning of the following month.

How to deposit money into an online savings account

There are a few ways to deposit money into your account:

  • Via your bank account. You'll usually need to link your savings account to a bank account, and deposit money into your bank account before transferring it into your savings.
  • Bank@Post. A lot of Australia Post shops offer Bank@Post which allows you to deposit cash at the office into your bank account, without visiting a branch.
  • In a branch. If your bank does have physical branches, you can choose to deposit cash into your account via a bank branch or smart ATM.
  • Direct debit. You can electronically send money to your account via direct debit (e.g.: your salary).

Benefits of online savings accounts

Online savings account offer a range of benefits, including:

  • You can usually link your online savings account to your regular Australian bank account

Many online banks make it easy to transfer money to and from your linked account. However, some will only let you link a bank account from the same institution. This means that you might have to open a new bank account just for your online savings account.

  • You get 24/7 access to your money

One of the best aspects of an online savings account is that you can usually access your money whenever you like. While the accounts are all accessible online via a web browser, most banks make it even more convenient with mobile banking apps. These allow you to monitor your savings activity even when you are on the go.

  • Deposited funds are safe

Ensure that your bank is an authorised deposit-taking institution; this means your deposits are guaranteed up to $250,000 by the Australian Government.

  • You get a competitive interest rate

High interest online savings account usually offer a higher interest rate than standard accounts, helping your balance grow. Some of these accounts offer bonus interest each month you meet the account conditions.

  • There are no fees

Generally, an online savings account does not attract any monthly account-keeping fees or transaction fees. Avoid accounts that charge monthly maintenance fees, statement fees and ATM charges.

  • $0 minimum deposit requirements

Some banks may require that you make a minimum deposit when first opening the account, or on an ongoing basis. Understand what you can and can't commit to in terms of deposits to choose the account that's best for you.

  • Flexible transaction limits

Check how many withdrawals you can make per month and how much you can take out. Your daily transfer limit may be capped around the $10,000 mark; you may be able to adjust this by calling the bank.

The downsides of online savings accounts

There are plenty of benefits, but there are also some drawbacks of an online savings account.

  • Needs to be linked to a bank account. Although you won’t have any fees on the account, there may be fees associated with the linked account used to manage it.
  • Can be delayed if funds are from different banks. Funds transfers may not be instant if they are coming from a separate financial institution.
  • No branches. Some banks are completely online (like ING and ME Bank) and have no bank branches available. This could be an issue if you do a lot of your banking in a branch.

Online savings account FAQs: The most common account questions answered

Do I get instant access to transferred funds?

If your online savings account is linked to a transaction account from the same institution, then you generally do get instant access. However, if the money comes from a different financial organisation, it usually takes up to three business days for the funds to appear in your account.

Can non-residents open an online high-interest savings account in Australia?

No. Even though the account is based online, the account holder must be a resident of Australia with an Australian residential address.

Are the accounts available for businesses?

There are online savings accounts designed specifically for businesses. Business owners need to apply for one of those rather than an account which is structured for personal use only.

Will I have to pay taxes on the interest earned on an online savings account?

Yes, interest is considered income and must be included in your annual tax return. Whether you will have to pay tax on it depends on the amount, your income and your personal circumstances.

Picture: Shutterstock

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    8 Responses

      Default Gravatar
      ShabnamApril 8, 2020

      Hi,

      Please send me the newsletter.
      please send me updated news of coronavirus.

      Thanks
      Shabnam

        Avatarfinder Customer Care
        MayApril 19, 2020Staff

        Hi Shabnam,

        Thank you for reaching out to Finder.

        We’re glad that you are interested in the Finder newsletter! A great way to sign up is to check out our guide on which the process is just as quick and easy as it can be.

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        Best,
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      Default Gravatar
      ChristySeptember 24, 2019

      Which bank will give me interest on an account with a large amount that I simply want access to at any time?

        Default Gravatar
        NikkiSeptember 25, 2019

        Hi Christy,

        Thanks for getting in touch! A high interest-earning savings account will be able to give you a bonus interest rate when you meet their bonus criteria such as no withdrawals or minimum deposits for a certain period of time. You can participate in this bonus criteria otherwise you are set to earn the standard variable rate as offered by the banks.

        It would be a good idea to compare your options on the page above, starting by entering the amount you wish to deposit and period of commitment on the calculator found on the table above. Hit calculate and it will show the interest earned per bank. Note that the longer you keep the money in the bank, the more interest you earn. You can also click the compare box beside each bank option and compare up to 4 options side by side for easier comparison. If you need further help, “how to find the best online savings account” is also stated on the page.

        As a friendly reminder, review the eligibility criteria, fees, interest rates, and terms & conditions of this account before applying. You may also contact the bank should you have any questions about their product.

        Hope this helps!

        Best,
        Nikki

      Default Gravatar
      BevSeptember 2, 2017

      Why don’t you have Ubank as a comparable option?
      Is there some downside with Ubank that I haven’t noticed?

        Default Gravatar
        LiezlSeptember 4, 2017

        Hi Bev,

        Thanks for reaching out.

        The offers compared on this page are chosen from a range of products Finder has access to track details from and is not representative of all the products available in the market.

        Moreover, it doesn’t mean that products not featured on this page are subpar to those listed here neither does the product arrangements signify order or ranking. That said, you may check UBank USaver’s rates and features for further details.

        Cheers,
        Liezl

      Default Gravatar
      LayaApril 14, 2016

      I applied for iSaver account. I have account number,there is no answer for my application.

        Avatarfinder Customer Care
        ShirleyApril 15, 2016Staff

        Hi Laya,

        Thanks for your question.

        During your application for the NAB iSaver, you’ll need to link it to an everyday bank account.

        If you’ve opened your account online, you’ll be able to select the option of having your ID verified electronically.

        Otherwise, you’ll need to visit a NAB branch to complete the standard 100-point ID check.

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