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Westpac launches new 3.00% p.a. savings rate, but what’s the catch?

Posted: 8 July 2020 7:14 pm
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Here are the eligibility criteria you need to meet to earn 3.00% p.a. with a Westpac Life savings account and how it compares to others in the market.

Westpac has today launched a market-leading bonus interest rate of 3.00% p.a. on its Westpac Life savings account. This is by far the highest ongoing bonus rate available in the market, but is it too good to be true?

Well, that depends on how old you are and how much money you've got in your savings.

What's the catch?

Like all high interest bonus savings accounts, there are some conditions to meet with the Westpac Life savings account before you get the top interest rate. First, the maximum variable rate of 3.00% p.a. is only on offer for customers aged 18-29. So if you're 30 or older, sorry, but you don't qualify. If you're over 30, you can still open the account, but you'll only be able to earn bonus interest up to 1.00% p.a.

In order to get the variable 3.00% p.a. rate, you need to grow your balance within the month, although there's no set amount that you need to deposit or grow your balance by. You just need to make sure your balance is higher at the end of the month than it was at the start.

You also need to link your Westpac Life account to a Westpac Choice transaction account and make five or more eligible purchases with your debit card. Cash withdrawals, BPAY payments and ATM transactions are not counted as eligible transactions. It's worth noting that the linked Westpac Choice account (which you're required to open to be eligible for the 3.00% bonus rate) does have a $5 monthly account-keeping fee. However, this fee is waived if you're a student, if you're under 21 or if you meet the $2,000 monthly deposit requirement.

Lastly, the maximum bonus rate of 3.00% p.a. is only available on balances up to $30,000.

How does it compare?

A maximum bonus rate of 3.00% is fantastic in today's low-rate environment, even though there are a few conditions to meet to get it. Whether the account is worth it largely depends on your age and your balance.

If you're 30 or older, the maximum interest rate you'll be able to get with the Westpac Life account is 1.00% p.a. This is also true if you're under 30 but you've got a balance larger than $30,000. In this case, there are many bonus savings accounts that offer much higher rates. For example, you can get 2.10% p.a. with HSBC for the first 4 months, 1.85% p.a. with Bank of Queensland, 1.80% p.a. with ING and 1.80% p.a. with ME.

However, if you're under 30 and have a balance less than $30,000, you'll really struggle to find a better ongoing variable interest rate than the 3.00% p.a. offered with Westpac Life.

Not impressed with your current savings account rate? It could be time to compare savings accounts and switch.

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