There are a variety of savings account types available for different contexts. You may find that some will suit your situation more than others, so it’s important to survey the suite of options on offer before committing to one. Here are the major savings accounts that you should be looking out for.
High interest savings accounts
Although technically not a unique account type, high interest is a major selling point for financial institutions when it comes to their savings accounts. High interest savings accounts facilitate greater growth at a faster rate, while also bringing flexibility for the account holder to deposit funds at any stage.
Online savings accounts
As simple as they sound, online savings accounts can be a useful and effective way of managing your funds. Keeping all of your dealings in an online space, whether that’s on your financial institution’s website or via an app, will actually cut out some of the costliest expenses associated with savings accounts. One of these is avoiding bank overheads which come with physical branch locations, as banks will often charge their members a fee of around $2.50 for staff-assisted transactions.
Also, while big banks like ANZ, Commonwealth Bank, NAB and Westpac don’t have to put as much effort into walking customers through their doors, online institutions are generally more aggressive when it comes to enticing their customers. This can result in better deals like higher interest rates on their savings accounts, which benefits all parties. Online savings accounts are offered more by banks and other financial institutions without a large network of branches, with the online space serving as their primary domain. In some cases, this can lead to higher interest rates on your savings account and lower overall fees.
Bonus interest savings accounts
Also known as conditional savings accounts, these contain built-in objectives for the account holder to meet to allow them to gain access to a higher interest rate. These will generally be requirements such as maintaining a certain balance in your account over a given period, meeting monthly deposit requirements and limiting your total account withdrawals. The inherent danger with these generally is that you run the risk of being given a far lesser interest rate, or none at all, if you don’t meet these requirements.Â
Retirement savings accounts
If you fit into an older age demographic, you might look into a retirement savings account to house your funds and potentially generate higher interest on greater deposits. These aren’t the same as superannuation funds, but they are regulated in the same way and bring with them the same tax benefits. These accounts are quite rare today due to the prevalence of superannuation funds in society, but there are banks and financial institutions who still offer them.
Kids’ savings accounts
These accounts are designed with simple, kid-friendly mechanics that can help your child learn about money and finances at a younger age. One major benefit of children's savings accounts is that they often come with no monthly fees, although other fees may be higher, while they can also include bonus interest rates as a way of incentivising kids to save. Parents can take on an overseeing role in teaching their children about the importance of saving and tips and tricks for doing so.
Business savings accounts
These are designed to cater to the needs of business owners who want to grow their principal with handy interest. Although these rates can be lower than those of personal accounts, more growth can be achieved with greater sums of money held in the account.
Cash management accounts
A cash management account is more useful for investors who want easy access to their funds for functions such as online trading. These often come with higher interest rates than other savings accounts, which are also boosted by greater overall deposits. Minimum balance requirements may be higher in these accounts than others, though.
