Yes, you can get a better interest rate with an online savings account.
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.
Let's jump in compare some online savings accounts that you can open today.
standard variable rate
Online Savings Account Offer
Introductory rate of 3.00% p.a. for 4 months, reverting to a rate of 2.10% p.a. The bonus rate offer is for new AMP Saver customers only, and applies to the first $250,000 deposited.
- Maximum Rate: 3.00% p.a.
- Standard Variable Rate: 2.10% p.a.
- Introductory period: 4 months
- Monthly fees: $0.00
Compare online savings accounts today
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 accounts interest rates are generally 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.
How to find the best online savings account
The best online savings account will help you manage your savings effectively to suit your savings goal and spending style. There may be more than one online savings account that is 'best' for your situation, and what is best for you might not be best for someone else.
It's important to consider what features of an online savings account are important to you, such as monthly fees, access to your balance, and interest rate when selecting an account. The accounts identified on this page are some of the best online savings accounts offered, however there are other accounts that may be better suited to your personal circumstances.
finder.com.au's featured online savings accounts
|Online savings account||Interest rate conditions|
|Rabobank Online Savings High Interest Savings account||Enjoy a high rate of 3.05% p.a. for 4 months with this online savings account.|
|HSBC Serious Saver||3.10% Available for 4 months, reverting to a rate of 1.20%.|
|Citibank Online Saver||2.90% Available for 4 months, reverting to a rate of 1.60%.|
|UBank USaver||2.87% when you link to an Ultra transaction account and deposit $200 per month.|
|ME Online Savings account||2.85% When you link to a ME Everyday Transaction account and make a weekly purchase with your Debit Mastercard using tap & go.|
|ING Savings Maximiser||2.80% When you link to an ING Orange Everyday bank account and deposit $1,000+ each month and make 5+ card purchases a month.|
|RAMS Savings Account||2.80% When you deposit 200+ each month and make no withdrawals.|
How do online savings accounts work?
You first need to ensure that you have an active transaction account (an everyday 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 do I compare online savings accounts on finder.com.au?
Using our table above, you can compare a range of popular online savings accounts side by side. If you want to find out more information about the account, click on the blue 'More' option to read our detailed product review. If you're ready to open the account, click the green 'Go to site' button to be securely taken to the bank's website where you can complete the online application.
Use the sorter button in our tables to compare the interest rates for online savings accounts, as shown in the image below.
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 few or 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.
Pros and cons of an online savings account
- Generally no minimum balance required. An online savings account should not have any minimum balance requirements. Some even allow you to open an account without any initial deposit.
- Competitive rates. Interest rates on online savings accounts are competitive with those of other savings accounts. You may even qualify for a bonus introductory rate.
- Flexible terms. Deposit what you can and make withdrawals whenever you can. Most online savings accounts don't have specific terms you need to meet, though bonus interest rates will often require a minimum deposit each month.
- 24/7 access. Use the internet to access your account 24/7.
- 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.
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.