Best Savings Accounts

Finding the best savings account to suit your needs.

Best Savings Accounts

Opening a savings account is the first step for many in achieving their short- or long-term savings goals. As such, narrowing down the right one can seem like a tricky process for an important decision, but this isn’t the case. While it is an important decision, it won’t be too hard for you to find one that fits your personal requirements. Read more about the best savings accounts, what they look like and how to compare them in this comprehensive guide.

How should I compare the best savings accounts?

Fortunately, you’ll find plenty of ways that you can go about comparing savings accounts that effectively narrow down your selection. Here are some of the key ways that set the best savings accounts from the rest.

Account type

There’s a wide variety of savings account types that you’ll be able to choose from and compare. There are savings accounts that are designed to fit just about every demographic, so consider the following options to see which suits your needs the most.

Type of savings account How it can help you Why you should consider other options

High interest savings account

As the name suggests, accounts of this nature will be able to give you the strongest return on investment when it comes to interest earnings

Many of the highest interest rates available are bonus rate savings accounts, meaning you’ll have to meet certain requirements each month (as outlined in the bonus rate section)

Online savings account

The best online savings accounts are convenient and easy to use, with account fees relating to branches scrapped due to the wholly online service

You may find that it’s simpler and less confusing to conduct your banking in person and have a staff member talk you through various processes

Kids’ savings account

Opening an account for your child can be a great way to teach them about money and improve their financial literacy, as well as access some of the best savings account interest rates

Bonus interest rate conditions can be restrictive for kids, especially if they aren’t fully aware of the machinations of their account, but parents can take an overseeing role to ensure any bonus rates are achieved

Business savings account

Specially designed for businesses and their owners, these can help cover for unexpected expenses down the road that would otherwise disrupt your finances

The required minimum balance for business savings accounts is generally considerably higher than personal accounts, which may be difficult for smaller businesses with more limited turnover

Student savings account

These accounts are tailored to tertiary students studying full-time and may come with fewer limitations on withdrawals than others

Interest rates on student savings accounts are generally lower than standard accounts, so you may find that these are better for your savings

Retirement savings account

They can be a great way to help save up funds for retirement and earn a good amount of interest on your principal to boost your finances

With the proliferation of superannuation funds in Australia, these accounts have become quite rare and are no longer seen as a necessity for retirees

Bonus rate savings account

These can provide you with access to some of the best interest rates on the market and can be four or five times larger than standard rates

Bonus rates come with a set of requirements each month, which tend to include a minimum total deposit of between $2,000 and $10,000 and maximum number of withdrawals of five or fewer, although these can vary

Introductory savings account

Similarly, introductory rates can provide customers with very high interest rates during their set period

As the name suggests, high rates are only available for a short time, usually less than a year, before reverting to standard or below average rates

Cash management account

These can be an effective way for investors to earn interest on their money while they’re not using it for trading, for example

Balance requirements can be stricter with these accounts, often requiring a higher minimum opening and ongoing balance than other  savings accounts

 

Interest rates

For any aspiring saver, finding the best savings account interest rates should be one of the priorities for you in the research process. The highest interest savings accounts will earn their account holder a sizeable amount of money on top of their principal, which is the original sum deposited into the account. Essentially, the higher the interest rate, the better your return. You can withdraw the interest as you earn it to make use of handy additional funds, but you’re likely to earn more interest if you keep it in your account. This is called compound interest, which calculates the total amount of interest earned on both your deposited amount and the interest already accumulated.

There are a few main ways that you’ll be able to access the best rates on a high interest savings accounts, which you can compare to determine which suits your needs. You can opt for an account with a higher base rate, which will remain relatively consistent throughout but isn’t likely to reach the highest interest rates for savings accounts. Alternatively, you can go for a bonus rate savings account or introductory rate savings accounts, which only offer interest rates under certain conditions.

Fees

One unfortunate reality of savings accounts is that, in many cases, you’ll have to pay several fees to both keep it running and allow you to access certain features. In certain cases, depending on the institution and account you choose, you may not have to pay many or any fees. Finding the best bank or financial institution for a savings account could come down to which are willing to waive the most important fees. Here are some of the fees that you may have to look out for:

  • Monthly account fees: these are charged each month and are usually only worth a few dollars, but this can add up to a sizeable amount over time. This is one of the most common fees to be waived on the best savings accounts, but this may hinge on you meeting monthly deposit, withdrawal and/or balance requirements. These are likely to be a minimal total monthly deposit of anywhere between $200 and $2,000, less than five and as few as zero withdrawals and a maximum ongoing account balance of between $50,000 and $250,000. You may also find that if you’ve linked a transaction account to your savings that this may incur a monthly fee, even if your savings doesn’t.
  • Transfer fees: again, this is an uncommon fee to be charged, but some institutions may charge you for completing an online transfer. This can be as simple as transferring from your savings account to your transaction account, which is a common transaction for people. Ensure that you won’t be charged for this if you’ll be completing transfers regularly.
  • ATM fees: withdrawing from an ATM can often incur a small surcharge, particularly if you do so from another institution’s ATM instead of your own. This is an important fee to have waived if you’re someone who often withdraws cash from their savings account.
  • Foreign transactions/conversions and overseas ATM fees: unlike others in this list, it’s unlikely that you’ll be able to avoid paying a fee for completing a transaction in another country or with someone overseas or withdraw funds from an ATM outside of Australia. Foreign transactions can also simply include transactions in another currency, and can include sending or receiving funds. While overseas ATM fees are usually a set amount, foreign transactions can also come as a percentage of the total transaction amount to account for currency conversion.
  • Branch service fees:  believe it or not, you could also be charged for completing a deposit or withdrawal at your local branch. If your account charges you for this, you might find that an online savings account would suit you better, or you can simply look for an institution which is willing to waive this fee.

See the table below for a breakdown of some of the savings account fees from some of Australia’s leading financial institutions.

Bank Monthly fees Transfer fees Foreign transaction fees ATM fees Overseas ATM fees Branch service fees
ANZ
$0
$0-$1
3%
$0
$5
$0-$2.50
CBA
$0
$0
$6-$37 or 1%
$0
$3.50
$0-$3
NAB
$0
$0
$10-$35 or 3%
$0
$5
$0
Westpac
$0
$0
2.2-3%
$0
$0-$5
$0-$2.50
BankSA
$0
$0
3%
$0
$3
$2.50
BankWest
$0
$0
2.95%
$0
$5
$0

Account requirements

Savings accounts will usually come with a set of requirements that have to be met each month, which may be to access a premium interest rate or avoid incurring a fee. The best savings accounts have less restrictive conditions in this area, so if you’re looking for the right one, try to go for one with achievable requirements. Some of these will include:

  • Deposit requirements: most accounts will have a required total deposit amount that must be made each month, which are likely to align with requirements related to waiving your monthly fee. This is most often completed with the depositing of your wages directly into your savings accou If you’re not 100% sure that your chosen account’s deposit requirements are achievable, move for one that you think you’ll be able to manage.
  • Monthly balance requirements: similarly, this can be difficult to manage if you have high monthly expenses. Minimum monthly balances can generally fall anywhere between $2,000 and $10,000 depending on the account you choose. There are still options for less than $2000 as well but you may not earn as much in interest. Ensure that your monthly bala
  • Withdrawal requirements: there may be a limit placed on the number of withdrawals you can make each month. If your account enforces this, keep track of your monthly withdrawals to ensure that you’re staying within the required number. Use these wisely.
  • Account linking: you may be forced to link an everyday transaction account to your savings account, in some cases with the same financial institution. If you want to keep your savings separate, though, there are accounts that won’t require any external linking

What’s the best bank or financial institution for savings accounts?

It’s important to note that there is no one “best bank” for opening a savings account. However, what is crucial is to understand and distinguish the differences between going with a bigger bank and a smaller bank or financial institution. This is the best way for you to find out what the best bank or financial institution for you is.

One of the key areas to be aware of when comparing how bigger and smaller banks and financial institutions operate is that smaller banks and those operating online, such as ING, are generally more proactive in seeking out deposits and new customers than the Big Four (ANZ, Commonwealth Bank, NAB and Westpac), which can prompt them to entice people into business with higher advertised interest rates. While online institutions may not be able to provide all of the same services as the big banks, you can benefit from greater return on investment in the form of high interest rates.

Another factor to consider in which institution is best for you is the ATM accessibility for each. While you won’t have a problem finding ATMs operated by the Big Four across Australia, you may encounter more issues tracking down dedicated ATMs for smaller institutions. The way that these institutions circumvent this issue is by arranging with the bigger banks to allow their members to access ATMs free of charge. ING, Adelaide Bank and Bendigo Bank won’t charge fees to their members for withdrawing from Big Four ATMs, while Bank of Queensland and Bank of Sydney are rediATM partners. Make sure you check with your institution to see which ATMs you can access without paying a fee.

Difference between savings and bank accounts

Common queries about the best savings accounts

How do I calculate what interest I’ll earn on the best savings accounts?

Principal x (1 + (interest rate ÷ compound frequency)) time period = final balance 

In this case, compound frequency refers to how often your interest compounds. Because this usually occurs monthly, you’ll most likely substitute the number 12 in here. Time period refers to period over which you’re calculating interest. This can be calculated by multiplying the number of years by the compound frequency, so if you were working out interest earned over three years, it would be 3 x 12 = 36.

If I get the best interest rate on my savings account, can I guarantee it’ll remain at the same level?

No – savings account interest rates are variable, meaning they’re subject to change throughout the period you have your account open. Rates can rise or fall in line with market movement, but your institution has the final say over whether your interest rate will rise or fall.

What type of savings account is best for me if I’m looking to save more money in the short-term?

If you want to maximise your interest earnings in a short period, you might look to a bonus or introductory rate savings account. This is because you don’t have to focus as much on meeting qualification requirements over an extended period and reap the rewards of high interest rates.

Can I switch between institutions to ensure I always have access to the best savings accounts?

Yes – it’s always important to compare between institutions and take advantage of the best deals where you can. Unlike loans or term deposits, savings accounts don’t have an established set term over which you’re obligated to remain. Savvy is a great place for comparing savings accounts, as we compare the best savings accounts on the market in the areas that are most relevant to you.

Do I have to give notice before withdrawing from my savings account?

Sometimes – there’ll be some account providers who will require that you provide a set amount of notice prior to withdrawing funds from your account. The best savings accounts won’t make you do this, though.

Can I share the best savings account with my partner?

Yes – this is called a joint savings account and can be taken out between partners, siblings, relatives or friends. Ensure that the co-owner of the account is a trustworthy one, though, as pooling savings can be dangerous in the wrong hands