fbpx

Fixed Rate Savings Accounts

Learn how to find the highest fixed rate savings account on the market by comparing with Savvy.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on July 28th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Compare savings accounts

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.  

site-logos Rabobank High Interest Savings Account
  Maximum interest rate Base interest rate Introductory offer period Government guarantee  
site-logos 5.75% p.a. 4.40% p.a. 4 months Yes
Go to site

Rabobank’s High Interest Savings Account helps grow your savings while offering flexibility and easy access to your money.

More details
site-logos Up Savers Account
  Maximum interest rate Base interest rate Introductory offer period Government guarantee  
site-logos 3.60% 0.00% N/A Yes
Go to site

Use invite code SAVVY10 for $10 upon successful sign-up. (Refer to offer T&Cs on Up website)

More details

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.

Compare fixed rate savings accounts

Locking your savings away at a fixed rate can give you peace of mind over your earnings and give you a safe place to house your money. Finding the best secured rate will allow your funds to grow faster.

Savvy makes shopping around for a fixed rate easy by helping you compare accounts and the interest they earn. Read our detailed guide to learn how to get the highest interest and accelerate your savings.

What is a fixed interest rate savings account? 

A fixed interest rate is a valuation that remains unchanged over a set saving period. This means the rate your interest is calculated at is set in stone for a fixed savings term. Fixed rates are standard features on term deposits, where you choose to lock your money away for a set period, and aren’t offered on standard savings accounts.

People choose fixed rate savings accounts, such as term deposits, for a variety of reasons. The main reason is they can be low-risk and low-maintenance forms of investment. Having a locked interest rate gives your savings an extra layer of security and you’re more accurately able to predict your earnings. For instance, if interest rates are falling, you may choose to lock in a top rate to avoid further drops in the market.

How is a term deposit different from a savings account?

Comparing term deposits and savings accounts highlight many stark differences between the two. Savings accounts come with a variable interest rate which can change in line with Australia’s cash rate, while term deposits have a fixed rate. Term deposits also have tougher restrictions on your money than savings accounts. You can only deposit or withdraw funds upon maturity or by providing your bank with 31-days written notice. Term deposits also come with fixed terms and can be expensive to open, with most banks requiring up to $5,000 to open an account. Interest on a savings account is calculated daily, while term deposits give you options of daily, monthly or annually.

How should I compare savings accounts with fixed rates?

When you’re comparing fixed rate savings accounts with Savvy, it’s wise to cast your eye over a range of different variables. Doing a quick comparison of these features can give your bank balance a major boost down the track. These variables include:

Interest

If you’re a long-term saver, the rate you lock in will be vital to the growth of your savings. The higher the rate, the better your return. For example, if you invested $30,000 in a term deposit earning 1.25% p.a. over two years, you’d reap up to $760 in interest. However, if you invested in an account earning interest at a rate of 2% p.a., you could earn up to $1,225 instead.

Break fees

Term deposits are generally low-cost savings options unless you want to tap into your funds. You’ve technically agreed with your financial institution to not touch your money for a set period, so if you do decide to access it at any time, you’re essentially breaking this agreement. You may incur a break fee of up to $30 if you apply to access your funds. These can vary from bank to bank, so it’s worth weighing up any charges before you open an account.

Account conditions

When you’re shopping around for the best fixed rate savings account, it’s important to consider minimum deposit requirements. Most term deposits for example require you to deposit between $1,000 and $5,000 to open an account. Comparing these accounts will allow you to find a minimum deposit requirement you can comfortably afford to make. You can also use Savvy’s handy budget planner to work out how to save up for a deposit.

Frequency of interest payments

How often your interest is paid into your account can make a huge difference to your savings balance. Interest compounds daily, monthly or annually, with the more frequent options providing you with a larger return. This is simply because the more frequently interest is added to your account, the more of it there is to compound. For example, if you had $100,000 invested in an account earning 2% p.a. for five years, you’d earn over $100 more in interest if it compounded daily rather than annually.

Term lengths

Your savings will grow faster the longer you let your money grow. Term deposits come with terms ranging from three months to five years, with different time frames having different interest rates. It’s important to remember that a longer length doesn’t always mean a better interest rate.

For example, you may earn a rate of 0.75% p.a. on a five-month term deposit but just 0.50% p.a. if you lock your money away for more than six months.

Types of savings account

Why compare savings accounts with Savvy?

Frequently asked fixed rate savings account questions

How is interest calculated on these accounts?

Interest is calculated on a term deposit by dividing the annual interest rate by 365 and multiplying it by the number of months you’ll be investing your money. If you don’t want to use slightly complicated formulas, though, you can use our compound interest calculator to work out how much you can earn.

What are the benefits of variable rates?

Variable rates come with added flexibility. They allow you to earn a high bonus or introductory interest rate and give you easier access to your money than accounts with fixed rates, which lock it away. Variable interest accounts also make it easier to contribute to your account and make deposits compared to fixed rate accounts.

Can I link an everyday account to my fixed rate account?

Yes – you can open a linked bank account connected to your fixed rate account. The interest you earn on your fixed rate account can be paid into your linked fund. However, you won’t earn compound interest if you’re interest is removed from your savings.

What are the tax implications?

Any interest you earn on your savings must be declared to the Australian Taxation Office (ATO). Whether you have to pay tax comes down to your gross income. If you don’t supply a Tax File Number (TFN) or an Australian Business Number (ABN), your financial institution may withhold your tax. The tax office sets tax brackets to simplify the process. As of May 2022, these are:

  • $0 to $18,200 – Tax-free
  • $18,201 to $45,000 – 19c for every dollar over $18,200
  • $45,001 to $120,000 – $5,092 plus 32c for every dollar over $45,000
  • $120,001 to $180,000 – $29,467 plus 37c or every dollar over $120,000
  • $180,001 or more – $51,667 plus 45c for every dollar over $180,000
What protection do I have over my money?

The federal government’s Financial Claims Scheme protects bank balances up to $250,000 per account holder. This comes into effect if your bank, credit union or building society collapses.

How do I open a term deposit?

You can open a term deposit at a branch or through an institution’s website. Term deposits come with a range of eligibility criteria, including being over 18 years old and an Australian resident, for tax purposes. Some banks allow children to open term deposits with their parent or guardian’s supervision. You’ll also have to provide two forms of ID, which can come in the form of a driver’s licence, passport or Medicare card.

Our savings calculators

Helpful guides on savings accounts

Types of savings account banner

Types of Savings Accounts

Whether you’re saving for a special day or a rainy one, banks offer many types of accounts to help you...

What is a savings account banner

What is a Savings Account?

A savings account gives you a safe place to store your money, no matter your age. Simply pop your funds...

Best savings accounts banner

Best Savings Accounts

Compare savings accounts Are you looking to grow your savings?  Compare a wide range of savings accounts with Savvy so...

Compare savings accounts banner

Compare Savings Accounts

Compare savings accounts Are you looking to grow your savings?  Compare a wide range of savings accounts with Savvy so...

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.