Fact checked
A savings account can provide you with a safe and secure place to house your money. No two accounts are the same, though, with each bank offering a slew of varying interest rates, terms and conditions and bonuses.
Savvy takes the headaches out of searching for a savings account. We offer easy-to-follow comparison information so you can find out more about how a savings account works and how to find the best one for your needs today.
Savings accounts give you a safe place to house money and accrue interest. Where a bank account’s primary purpose is for day-to-day transactions and spending, a savings account allows you to put money aside that you can afford to do without.
They can take many forms, with financial institutions providing savings accounts tailored to demographics such as children, students, pensioners, couples and business owners. These accounts come with varying requirements and terms which best suit the account holder’s age and financial status.
Interest can be compounded daily, monthly, quarterly or annually, depending on the type of account you choose to open. Banks determine these interest rates based on the national cash rate, which is set by the Reserve Bank of Australia (RBA). This interest is calculated at a percentage set by your financial institution against your balance. You can use Savvy’s handy compound interest calculator to estimate how much interest you would earn from your savings.
Institutions will likely offer two different rates on savings accounts: a base interest rate and a higher bonus interest rate. To qualify for the higher rate, you must meet certain account conditions such as minimum deposits or balances and no withdrawals. These bonus rates can represent an increase of up to 200% or more on their original rates.
Savings accounts also come with different levels of access. Where an online savings account gives you easier access to your money, a term deposit locks your funds away until the term has matured.
The conditions for opening an account are straightforward: you must be 14 years old and have an Australian residential address for tax purposes. If you’re under 14 years old, you can open an account at a branch, but you must be accompanied by a parent or carer.
Choosing the right savings account can seem like a minefield, especially when it comes to weighing up the individual variables. Comparing with Savvy makes the process stress-free, providing you with the tips and tricks to get the best account on the market. Things to compare include:
Interest rates
Getting an account with a high interest rate means you’ll grow your account balance faster. Savvy allows you to do a side-by-side comparison of competitive deals to find the best one for you. We also offer an easy-to-use savings calculator to allow you to road-test various rates to see how they work with your savings goal. Achieving a higher rate can also earn you more interest. For example, if you deposited $1,500 monthly into an account earning 0.5% p.a., you’d earn $1,115 interest over five years. However, if the rate on your account was 1% p.a., your interest would reach $2,249 in the same period.
Account requirements
Savings accounts can come with various conditions, such as minimum balances or deposits. Achieving a bonus rate is almost always conditional on you meeting these requirements. For instance, you may be required to deposit $1,000 into your online savings account every month. You can compare with Savvy to find a set of conditions which you can comfortably afford to meet.
Depositing
Before opening a savings account, work out how you’ll be contributing to your fund. Some accounts are more restrictive than others, so it’s important to do your homework. A term deposit will only allow you to make deposits upon maturity, whereas an online savings account allows you to top up whenever you want. You can use Savvy’s goal calculator to work out how much you have to regularly deposit to reach your savings goal.
Withdrawing
When it comes to allowing you to dip into your savings account, some funds are more flexible than others. For instance, term deposits won’t let you dip into your funds until maturity, whereas online savings accounts will allow you to transfer whenever you want. Comparing with Savvy will enable you to more accurately decide on which offer affords you the level of access you need.
Fees
While savings accounts are pretty much fee-free, there are some costs to watch out for when comparing deals with Savvy. These costs, such as $5 monthly account fees or $2.50 paper statement charges, can seem insignificant in themselves, but added up over 12 months they can start to eat into the interest you earn.
Linked accounts
A linked everyday account can be a handy way of accessing your cash to spend on living expenses. Some financial institutions require you to open an account with them, while others allow you to keep your transaction account with another institution, so it’s important to weigh up each institution’s stance on this if you want to keep your existing account.
Extras
Institutions can come with bonuses such as ‘round-up’ features. Every time you make a purchase on your linked account, the amount is rounded up to the nearest dollar and the extra is fed back into your savings account. Some banks also offer tools to make saving easier, such as a goal tracker on your mobile app. This breaks your goal into weekly targets and helps you set up automatic deposits.
Are you looking to grow your savings? Compare a wide range of savings accounts with Savvy so you find the best deal in Australia and the highest interest rate to help grow your savings.
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Disclaimer: Savvy is not advising or recommending any particular product to you. We provide general information on products for the purposes of comparison, but your personal situation or goals are not considered here. Although we try to make our comparisons as thorough as possible, we do not have information on all products on the market on our site.
You should always consult a given offer's PDS or further documentation in the process of deciding on which loan to choose, as well as seeking independent, professional advice. If you decide to apply with one of the lenders listed above via our website, you will not be dealing with Savvy; any applications or enquiries will be conducted directly with the lender offering that product.
Use our savings calculator to help you calculate how much you could save over a set timeframe based on different deposit sizes and frequencies.
Your savings can put in work for you. Crunch the numbers to see how much interest you could earn on top of your interest by compounding daily, monthly and annually.
It's crucial to have a clear idea of your monthly household budget to see where your money is going and where it could potentially be better spent.
If you're applying for a loan or need to know what your salary is for your tax return, you can use our annualisation calculator to work out what you'll earn this financial year.
Setting savings goals is important. With this tool, you can work out how much you'll need to deposit to reach your financial aims over a set timeframe.
Just as important as knowing how much to deposit is working out how long it'll take to reach your goals. This savings goal calculator can help you do just that.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
