Savings accounts the little guys make a comeback

March 11, 2011

When considering a new savings account from a field of lenders, the majors often stand out from the pack while the little guys barely get a look-in. But increasing competition means these smaller lenders are vying for your attention, offering unbeatable deals.

Compare and save
While the Commonwealth Bank‘s GoalSaver enjoys its success of a 6 percent interest rate, Bankwest‘s Regular Saver account tops this with 7 percent – a whopping 1 percent difference – as well as no monthly fees. Simply deposit between $50 and $500 per month and link it to your existing Bankwest account.

Shop around
Be on the lookout for high interest rates teamed with no monthly fees while reading the fine print on minimum deposit requirements and withdrawal restrictions.

Take Virgin Money’s Virgin Saver, for example, offering 6.51 percent for the first four months (then reverts to 5.35 percent) with no monthly fees or minimum opening balance.

Some online accounts offer tight security via secondary authentication demanding a password for every transaction, while others offer high interest if linked to your existing account with the same bank. For example, Citibank‘s Online Saver account sports 6.40 percent interest for the first six months. But remember, ATM facilities are usually not part of the online world.

Ways to save
Create a budget using a spreadsheet to lay your finances out in front of you. A good rule of thumb is saving 10 percent of your salary, but even a small, regular deposit can spell big bucks.

For example, substitute your cafe-bought lunch with leftovers from last night’s dinner and save $50 per week to earn you $5200 in two years – that’s enough for a trip to Europe! And put it in a savings account, such as UBank’s USaver, which boasts 6.51 percent interest and you’ll pocket a generous $312 in interest. There’s your travel insurance covered!

Skipping that morning coffee could save you $3 a day, equating to $15 per week, and stretches to $780 per year – that’s enough for a new laptop!

If you spend $100 a week on going out, opt for home-cooked meals with friends instead, that’s $5200 a year to save. Drive to a carpark that’s $5 a day cheaper, walk a few blocks to work and you’ll have $1300 stashed away.

Keep a diary tracking daily expenses to pinpoint your weaknesses and curtail unnecessary splurges – you’ll be surprised where your money goes! Adopt a little discipline and watch how a few little sacrifices can go a long way.

Related savings account links

• Commonwealth Bank GoalSaver
• Bankwest Regular Saver
• Don’t get trapped by your savings plan
• High Interest Savings Account

Compare savings accounts