Opening A Savings Account

Savvy can show you how to open a savings account as well as help you compare the best deals on the market.

Last updated on June 24th, 2022 at 01:51 pm by Kurtis Eichler

Compare and find the best savings account

Gone are the days when opening a savings account meant lining up at a bricks-and-mortar bank and filling out a stack of paperwork. Nowadays, online processes fast-track your application so you can be working towards your saving goals in just a matter of minutes.

It’s essential to find an account that makes meeting those savings targets easier. Savvy helps by giving you a side-by-side comparison of accounts, as well as detailed information on how to compare savings accounts to find the one that’s best for you.

How do I open a savings account?

Opening a savings account is relatively straightforward these days. Most institutions make it easy for you to open savings accounts online. If you’re wondering how to open a savings account, follow these simple steps.

1. Choose your account by comparing with Savvy

No two savings accounts are the same, and everyone’s got different goals. That’s why it is important to find an account that best suits your financial needs. By comparing with Savvy, you can find an account which helps you reach your savings goals. You can use our side-by-side comparative table to find the account with the best features, as well as use our in-depth guide to pick up tips and tricks for comparing deals.

2. Check that you’re eligible and prepare your ID

Once you’ve found a savings account that suits you, double-check you meet the eligibility requirements. These include:

  • Age: In most cases, you must be over 12 years old to open a savings account by yourself. If you’re under 12, you’ll need to apply at a branch and be accompanied by a parent or caregiver.
  • Residency: For tax purposes, you must be living in Australia or have an Australian residential address to open a savings account.

You will also need to provide a form of photographic identification. This can come from various forms, including:

  • Passport: You can submit a copy of an Australian or foreign-issued passport which is either still valid or expired within the last two years.
  • Driver’s licence: A back and front copy of your valid driver’s licence is sufficient as photo ID.
  • Proof of age card: This card is issued by states or territories and can be used for general identification.
  • Identity card: You can submit a foreign government-issued travel document or identity card as proof of your identity.

3. Submit your application

You can now apply to open your desired savings account. This usually takes about five to ten minutes and you’ll usually have to enter your personal details, contact information and proof of identification. Most financial institutions use secure portals where you can upload your personal information with the peace of mind it’s being kept in a safe place. If you want to open it at a branch, make sure you have all your documents with you.

4. Open your savings account

Once your application has been rubber-stamped, your bank should open your account. You should be able to start depositing your hard-earned funds as soon as you get a BSB and account number. Your financial institution will email or post you a ‘welcome pack’ which will contain information on fees and the terms and conditions.

What types of savings accounts can I open?

These days, the types of savings accounts available are varied. Whether you’re a parent opening an account for your child or a couple looking to make the most of your nest egg, it’s important to choose the right account for you. Some of your options when looking to open a savings account will include:

Online savings accounts

A common and easily accessible option, an online savings account usually comes with low fees and high interest. Most financial institutions will allow you to set up multiple online saver accounts so you can squirrel money away for different goals. This type of account usually comes with a linked everyday account option which makes it easy to access your money.

Bonus interest accounts

These accounts reward you with higher interest rates in exchange for hitting monthly account benchmarks. These can include minimum balance or deposit requirements and not exceeding your withdrawal limit. These accounts generally have very few fees and can help motivate you to save money.

Joint accounts

Joint savings accounts allow two or more people access to a fund, depending on the protections you’ve agreed on. You’ll need to choose between giving each account holder access to funds or requiring all account holders to approve any withdrawals or changes (known as “either to sign” and “both to sign”, respectively). Usually taken out by couples, this account can also suit housemates, parents and their children and business partners who need a collective place to stash and access money. Having two people depositing money into one place can help reduce the impact of fees associated with accounts and boost the interest you earn.

Kids’ savings account

Learning how to manage money is one of the fundamental skills of life. Opening a savings account for your child can incentivise savings goals, allowing them to see in real-time how a small investment over time can grow into a large pool of money. Kids’ savings accounts often come with no fees, high rates and bonus interest features.

Term deposits

A term deposit locks your money away for a fixed term and at a fixed rate. This allows you to earn interest on your cash without having the ability to dip into it. Terms can range from one month to five years depending on who you bank with. You’ll also get the choice to reinvest your interest or have it paid into a linked account. If you choose to reinvest, you can use Savvy’s compound interest calculator to see how to maximise your savings.

How should I compare savings accounts?

Frequently asked savings account questions

Can I have multiple savings accounts?

Yes – if you’re saving towards different goals, you can open multiple accounts. This can be handy if you’re saving for an upcoming holiday or wedding, but you risk earning less interest and paying more in fees by having multiple accounts. If you’re wanting to split your account to plan for various purposes, you might be better off with one which allows sub-accounts to be opened, meaning you’ll earn the same interest on all of your funds. You can use Savvy’s money saving goal calculator to plan how long it will take to reach your savings goals by factoring in variables such as regular deposits and interest rates.

What protection is in place over funds in my savings account?

The Federal Government-backed Financial Claims Scheme protects bank balances up to $250,000 in the event your financial institution collapses. The scheme covers banks, credit unions and building societies.

Is a credit check involved when opening a savings account?

No – credit checks only apply if you’re applying for credit-related products such as personal loans or credit cards. If you apply to open a savings account, your credit history won’t be a factor.

Can I get an overdraft on a savings account?

No – overdrafts are really only available on transaction accounts which allow you to withdraw money beyond $0, functioning much like a line of credit.

Do I have to declare the interest I earn in a savings account on my tax return?

Yes – if you’ve earned interest on the money in your savings account, you’ll need to declare it as income and pay tax on it. This interest will be rolled into other earnings to determine your taxable income. The tax rate is different depending on your taxable income. For example, you won’t have to pay any tax if you earn under $18,200 (as of April 2022).

Do I get an ATM card with a savings account?

No – you’ll only get an ATM card if you have an everyday transaction account linked to your savings account. You’ll need to transfer money to your everyday account to spend it using your card.