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Long Term Savings Account

Read Savvy’s in-depth guide to comparing long-term savings accounts and get the most out of your money.

Written by , updated on July 28th, 2023

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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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Compare long-term savings accounts

Long-term accounts can be great places to set and forget your cash to save for a big purchase, such as a house deposit. If you’re in it for the long haul, you’ll need to find an account which delivers the best bang for your buck.

Learn how to compare and find the best long-term account deals on the market with Savvy. We show you simple and fuss-free ways to sniff out the best deal and compare offers to help you hit your savings target.

What is a long-term savings account?

Long-term savings accounts are geared towards people who want to build a nest egg over an extended period. They’re often also geared towards people who can afford to leave their money untouched to accrue interest over many years. Through the magic of compound interest, the longer you leave your funds ticking over, the more interest you’ll earn. For example, if you deposited $1,500 in your savings account every month at a rate of 2.5% p.a., you'd earn over $5,700 in interest after five years. However, if you extended that to ten years, you’d earn more than $24,000 in interest. You can use Savvy’s savings goal calculator to road test how to achieve your targets.

These accounts come with various features depending on which type of account you choose. A term deposit locks your money away for a considerable period so your funds are untouchable, whereas an online saver allows you easier access to your funds when you need it. The types of people who opt for long-term savings accounts are those with far-off goals. They may be saving for their retirement or a house deposit, as opposed to savers with short-term goals who are depositing money away for a holiday or a new household appliance.

What types of long-term savings accounts exist?

Financial institutions offer a wide range of long-term savings account options for their customers, with various levels of flexibility. These accounts include:

Online savings accounts

The most widely available form of savings account, an online saver is the perfect entry-level savings account for many people. These types of accounts often don’t require you to have a minimum balance, so you can open an account with nothing and start building from there.

Bonus saver accounts

These savings accounts reward you with a high interest rate if you fulfill monthly requirements. Conditions generally include monthly minimum account balances or deposits (either a certain number or a dollar figure) but can also hinge on not making any withdrawals. If you don’t meet these requirements, you’ll earn interest off a much lower base rate for that month. By comparing with Savvy, you can find an account with manageable requirements which best suit your financial circumstances.

Business savings accounts

Tailored to self-employed people or small business owners, these funds allow you to stash cash for an upcoming project or future tax payments. While these accounts operate similarly to standard savings accounts, they can only be opened if you have a registered ABN. You can also only use your savings for business-related spending.

Term deposits

A typical risk-averse form of saving, a term deposit allows you to lock away a sizeable deposit for a set term. These terms can be anywhere from one month to five years and offer you a competitive fixed interest rate so you’re protected from any movements in the cash rate. If you need to access your money, you’ll need to provide at least 31 days’ written notice.

Kids’ savings accounts

Children’s savings accounts allow parents to teach their kids the fundamentals of finance and the basics of savings. Most institutions offer these accounts, which reward children with high interest for meeting monthly account requirements.

Joint accounts

Suited for couples wanting to save towards a shared goal, financial institutions allow most accounts to have dual signatories. You’ll have to agree on the protection and access over the account, with ‘one to sign’ or ‘both to sign’ options usually available.

Retirement accounts

Operating similarly to a super fund, these accounts allow you and your employer to contribute towards your retirement. The key difference between this and a super fund is your savings won’t be impacted by market volatility. Largely relegated to the endangered species list of accounts offered in the banking world, a few certain institutions still offer this type of savings account. Once you hit retirement age, some banks offer accounts tailored towards pensioners over the age of 65. The benefit of these accounts is you get unlimited access to your money without it affecting your interest rate and can take advantage of combined transaction and savings accounts.

How should I compare long-term savings accounts?

You probably wouldn’t buy a house or a car without comparing your options, so you should do the same for a savings account. When comparing with Savvy to find the best place to store your cash, it’s important to look at several variables, including:

Interest rate

Getting the best growth on your savings account comes down to your interest rate. Picking a competitive rate can accelerate the achievement of your savings goals. You’d earn almost $1,200 more in interest with an account earning 2.5% p.a. over five years with $500 deposited monthly than the same account at a lower rate of 1% p.a.

Interest rates come in various shapes and sizes and Savvy can help you compare them. Different types of rates include:

Standard rate: The base rate of interest you’ll earn taking out promotional offers or bonuses. Always check this, as it’s the percentage your interest will be calculated on if you can’t meet your account requirements.
Bonus interest: You can be offered a bonus high interest rate for meeting monthly account conditions. Compare these rates and their requirements to find a manageable option for you.
Introductory rates: These rates give you a short burst of high interest lasting up to around six months before reverting to a much lower standard rate.

Balance requirements

Some savings accounts come with a raft of conditions, including that you have a minimum opening or ongoing balance. Meeting these requirements will earn you a better interest rate. By comparing these conditions, you’ll be more likely to find a set of requirements you can manage comfortably.

Withdrawal access

Different accounts have different rules around touching your money. Work out if you’ll need to dip into your funds when weighing up what type of account to open. This will prevent you from being caught short if you’ve opted for an account with tough restrictions. You can use our online calculator to see how long it will take you to reach your savings goal using several variables.

Deposits

Some accounts come with minimum deposit requirements. Comparing offers with Savvy will allow you to see first-hand which conditions suit what you can afford to regularly tuck away. You can also use Savvy’s handy online calculator to work out how much you’ll have to deposit to reach your savings target.

Fees

Financial institutions charge a range of fees for the ongoing running of your savings account. These charges can seem relatively minuscule but can add up over time. For example, some banks charge up to $5 in monthly account fees and $2.50 to send you a paper statement. You can even be charged $2.50 for asking a bank teller to make a withdrawal from your account.

Linked accounts

Among the products institutions offer are linked everyday bank accounts. You can transfer a portion of your savings to this account for spending whenever you see fit. It’s worth comparing the guidelines around these, as some banks require you to open a linked bank account with them, while others won’t be fussed.

Types of savings account

Online accounts

Your account doesn't have to be with a bricks-and-mortar bank. By opening an account with an online institution, you can manage your funds via online banking and apps.

High interest accounts

When it comes to growing your savings, the higher the interest, the better. High interest accounts can either come with higher base rates or steep bonus rates.

Kids' accounts

Opening an account for your child can be a great way to give them a head-start with their savings and help teach them about the responsibility of managing their money.

Student accounts

Keeping track of your funds and growing them is important as a student. Some providers offer special accounts with high interest and no fees to help you boost your savings.

Joint accounts

There are many reasons why you may need a joint account, such as if you're combining funds with your partner or managing your parents' money with your siblings.

Business accounts

Businesses have different needs when it comes to their savings, so many banks and other financial institutions offer specialist products designed to offer flexibility.

Bonus interest accounts

Many savings accounts offer bonus interest, which can offer a much higher rate if certain conditions are met, such as a set number of deposits or linked transactions.

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Frequently asked savings account questions

How is interest calculated on long-term savings accounts?

Interest is generally calculated daily on savings accounts and paid monthly, but this depends on the type of savings account you’re opening. This is done on a compounding scale, meaning interest is calculated on your entire account balance, including the interest you’ve earned.

Can I have my wages paid into a long-term savings account?

You can have your salary paid into your savings account and transfer an amount each month for regular spending to a linked everyday account. Compare the withdrawal requirements on accounts, as you may lose interest if you dip into your account.

What security do I have over my money?

The federal government-backed Financial Claims Scheme provides a safety net in the event your bank, credit union or building society collapses. The guarantee protects bank balances up to $250,000.

Can I have more than two account holders?

Yes – you can open a joint long-term savings account with more than two account holders. These are quite common for companies with boards of directors who are required to all sign off on transactions or account changes. Some banks only allow you to have more than two account holders if you open it at a branch.

What are my options if I’m after a short-term savings account?

A range of products exists for short-term savers, including online savings accounts and those with introductory interest. Most online accounts have no fees or requirements and introductory offers can provide you with a period of high interest to help reach your short-term savings goal.

Our savings calculators

Savings calculator

Use our savings calculator to help you calculate how much you could save over a set timeframe based on different deposit sizes and frequencies.

Compound interest calculator

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.

Budget planner

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.

Income annualisation calculator

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.

How much to deposit

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.

How long to save

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.

Helpful guides on savings accounts

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Disclaimer and important things you should know

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.

1300 974 066

Sign up to our newsletter

Disclaimer and important things you should know

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.