Term deposits
Term deposits let you set and forget your money for a set period. You will have to make an upfront deposit to open an account, in the ballpark of $1,000 to $5,000, and secure the funds for a set term. These terms can be anywhere from one month to five years. Interest on a term deposit is paid monthly, annually or upon maturity, depending on the term you choose. You can only access your money upon maturity or by providing 31 days’ written notice to your financial institution. You can use Savvy’s compound interest calculator to give you an estimate of how much you’ll earn from your savings account.
High interest savings accounts
High interest savings accounts offer more competitive rates to help your account balance grow. They offer bonus high interest rates which are conditional on you meeting monthly spending, balance and deposit requirements. For instance, you may have to deposit more than $250 every month and make no withdrawals to earn the highest interest. These accounts give you the ability to withdraw and deposit at any time but tend to come with fees such as monthly account keeping charges, which can be up to $5. Comparing with Savvy will allow you to find a savings account with a set of conditions you can easily afford to meet every month to keep you earning the top rate.
Business savings accounts
Business accounts give you a spot to park funds you don’t use for day-to-day expenses. Tailored to small business owners or the self-employed, money in these accounts can only be used for business-related purchases. Business savings accounts often come with introductory interest rates, allowing you to earn a higher rate for a period of up to six months before reverting to a much lower base rate.
Retirement savings accounts
Also called superannuation accounts, these allow you to put money towards your retirement while you’re working. They’re seen as a low-risk alternative to a super fund because its performance is controlled by an interest rate, not the performance of the share market. The account is governed by many of the same rules as super funds, including limiting access to your funds. Like a super fund, you’ll only be able to withdraw from your fund upon retirement or if you’ve reached preservation age (between 55 and 60 years old).
Pensioner savings accounts
Hybrids of savings and transaction accounts, these give pensioners and retirees and place to stash their cash. A pensioner savings account gives you increased flexibility without forcing you to forfeit your higher interest rate. Because of the nature of these accounts, you won’t be able to earn as high an interest rate, but their value to pensioners comes in large part through their accessibility and simplicity compared to having multiple accounts.
