Types of Savings Accounts
Savings accounts come in many shapes and sizes. Learn how to compare different types with Savvy to find the one that suits you.
Fact checked
Whether you’re saving for a special day or a rainy one, banks offer many types of accounts to help you achieve your savings goals. Picking the right one can be tricky, but not when you compare with Savvy.
By comparing accounts with us, you can find one which gives you the best chance of achieving your savings target. Read our comprehensive guide to learn what to look for when doing your homework.
What are the different types of savings accounts?
Savings accounts come in all shapes and sizes, with many options tailored to different goals and demographics. Accounts will vary from bank to bank, but comparing these accounts with Savvy will help you find the right one for you. These savings options include:
Online savings account
Gone are the days when savings accounts were only accessible via a visit to your local branch. Nowadays, institutions offer online savings accounts which allow you to track your savings progress using internet and mobile banking. These accounts can either come with bonus or introductory interest rates. Bonus interest allows you to earn a competitive rate for meeting multiple monthly conditions, typically relating to deposits, balance and withdrawals. Introductory rates entice you to open an account with short-term high interest rates, with your rate reverting to a much lower base rate after several months. Comparing with Savvy will help you find the best interest rate and most affordable account conditions on the market to maximise your bank balance.
Term deposit
A low-risk and low upkeep way to save, term deposits are geared towards long-term savers. Term deposits differ from savings accounts because your money is locked away for a set term at a fixed rate, with access to your cash only allowed at the date of maturity. You can also write to your bank and ask for access, but you must give them 31 days' notice. You also won’t be able to deposit regularly into your account, with an upfront payment of between $1,000 and $5,000 required to open a term deposit. Interest on term deposits is usually paid annually or at the end of the set term.
Business savings account
Tailored to the self-employed and small business owners, business savings accounts give you a place to earn interest on funds you’re not using. You need an Australian Business Number (ABN) or Australian Company Number (ACN) to open an account, and the funds can only be used for business-related expenses. You’ll usually be required to hold a minimum account balance in this type of savings account, which will be one of the conditions for you to earn high bonus interest.
Joint savings accounts
Ideal for couples with a shared savings goal, a joint savings account gives more than two people access to the same pool of money. Different types of accounts, including online savings accounts and term deposits, can be opened jointly. These come with ‘one to sign’ or ‘both to sign’ options. ‘One to sign’ gives either person full access to the account, whereas ‘both to sign’ means both signatories need to give the okay for any use of their funds.
Retirement savings accounts
These savings options operate very similarly to a super fund but aren’t subject to share market volatility. Retirement savings accounts allow you and your employer to make contributions while you’re working, before allowing you to access your money upon retirement or the preservation age of 65. Only a small number of institutions offer these accounts, so you’ll be restricted from shopping around for different types of funds, and their return is much lower than a standard super account.
Kids’ savings accounts
Financial institutions have a range of savings accounts for children to help you teach your child the fundamentals of banking and saving. They allow you to build interest for your child, give you control over their spending once they’re old enough to withdraw and usually come with no fees. These accounts are restricted to those under the age of 18, but children from the age of 14 years old can hold a kids’ savings account on their own. Parents can open these accounts for their children from birth.
Student savings accounts
Geared toward primary and secondary students and those studying at university or TAFE, student savings accounts give under 30s a chance to put money away. These savings accounts allow you to link to an everyday account so you can transfer savings for spending. These accounts don’t differ greatly from standard savings accounts, except they do tend to have higher interest rates. Once you finish studying, these accounts typically roll into standard savings accounts.
Pensioner savings accounts
Designed for those on a government pension, pensioner savings accounts allow you to access your money freely and still earn interest. This makes them somewhat of a hybrid of savings and transaction accounts, maximising your accessibility. Interest is tiered on these accounts, meaning the higher your balance, the higher your interest rate. These accounts do tend to have a lower rate of return, though.
Christmas savings account
These types of savings accounts allow you to save money ahead of the Christmas/New Year holidays. Referred to as a Christmas club savings account, these funds are similar to term deposits except you can make unlimited deposits into your account between February and October. You’ll also only be able to dip into your funds between November and January
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.
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 |
|||||||||||||||||
|
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|||||||||||||||||
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.
Top tips for finding the right savings account
Have a savings goal
Set yourself a savings goal and plan how you’ll achieve it. This will help you work out how much you can afford to deposit weekly to hit your savings target and the type of account best suited to your aims. Use Savvy’s handy budget planner calculator to work out how much you have left over to put aside.
Balance fees and interest
While they are generally fee-free, some savings accounts do have added costs, including $5 monthly account keeping fees. Use Savvy to find a high interest, low-cost account to avoid your interest being eaten up by fees.
Compare with Savvy
Doing your homework is the key to finding a savings account that works the best for you. Savvy helps you compare interest rates, conditions and a range of other variables to make finding the right type of account simple and headache-free. You can even use Savvy’s savings calculator to road-test various interest rates.
Consider all types of institution
Credit unions and online banks may have more competitive interest rate deals than the big banks. Make sure you compare offers with the smaller banks to get the best account on the market.
Frequently asked savings account questions
Our savings calculators
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.
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.
