Savings accounts have many advantages, whether it’s providing a safe place to house your funds or earning interest on the money you’re not using. Finding the right mix of benefits can earn you a better return on your money.
By comparing your options with Savvy, you can find an account which benefits you most and boosts your balance. Follow our easy-to-use guide for tips and tricks on how to weigh up which fund is right for you.
Whether it’s the ability to earn interest or the peace of mind you have security over your money, there are many advantages to opening a savings account. These include:
Earn interest on your money
Savings accounts allow you to earn interest on your money, which can help you grow your balance. To grow your interest and achieve your goals quicker, you’ll have to find a competitive interest rate. These vary from bank to bank and are calculated as a percentage based on your balance. For example, if you invested $1,500 per month at 1.5% p.a. over five years, you’d earn $3,400 in interest. However, if you invested at a rate of 2% p.a. instead, your interest would add up to over $4,500. By comparing with Savvy, you’ll be able to find the market’s top interest rate so you can get the best bang for your bucks.
Make regular deposits
You can contribute to your savings account regularly to build up your balance and yield higher interest. Banks even reward you with bonus interest rates if you deposit a certain amount or keep a minimum balance in your account, which can be more than ten times the original base rate. They’ll allow you to schedule automatic deposits to your savings fund so you can ‘set and forget’ your money.
Affordable to open
Financial institutions will generally let you open a savings account with just a few dollars. This makes them a more approachable form of investing for people who can’t get a deposit for a home loan together or afford to buy shares to trade on the stock market.
Safe investment option
Savings accounts are seen as low-risk investment options because they aren’t subject to share market volatility. You also have some security over your savings with protection through the federal government’s Financial Claims Scheme. This scheme guarantees bank balances up to $250,000 in the event your bank, credit union or building society collapses.
Ability to open a joint account
A great option for couples, joint savings accounts are perfect for those with a shared savings goal. It gives you one pool of money to contribute to, potentially yielding a higher level of interest than you’d earn on separate accounts. Before opening a joint account, discuss the type of protection you want over your money and what happens to the money if you need to close it.
Builds strong saving habits
Seeing your savings account balance grow over time can be a good incentive to keep putting money away, no matter your goal. You may be more inclined to cut back on discretionary spending and budget to put more away each week if you can see a tidy sum of money building up. If you need a hand working out how much to contribute to reach your target, you can use Savvy’s savings goal calculator.
Linked everyday bank accounts
Institutions will let you access your savings through a linked everyday bank account. You can transfer money from your savings via internet banking to your linked account for easy access. Some banks require you to open a linked account with them, but others allow you to have your transaction account with another institution.
Easy access to money
Despite being specifically for saving, these accounts are often quite flexible and allow you to dip into your funds when you need them. However, one of the disadvantages is that tapping into your money can mean forfeiting a high interest rate in some cases.
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.
|Rabobank High Interest Savings Account|
Rabobank’s High Interest Savings Account helps grow your savings while offering flexibility and easy access to your money.More details
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Savings accounts can charge monthly fees which can eat away at the interest you earn over time. Even though savings accounts generally are fee-free, double-check any hidden costs to ensure you’re going to make the most out of your money.
Some savings accounts can come with a raft of monthly requirements for you to qualify for a high interest rate. Draw up a budget and calculate how much you can comfortably afford to save and find an account with a set of conditions you’ll easily be able to manage. You can use Savvy’s income annualisation calculator to project your income for the year when setting up your budget.
Comparing your options with Savvy gives you the best shot at finding a fund with the best rate of return. We provide you with knowledge and handy tips to help make your decision easier so you can reap a bigger return on your investment.
Setting yourself a savings target will help motivate you to save. This can be a short or long-term target, such as saving for an upcoming wedding or putting money away for your retirement. Banks have a range of tools to help you monitor your progress and watch as you hit your savings goal.
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.