When looking for a savings account, bank account or other savings vehicles, there are a variety of ways to turbo-charge your returns, such as choosing higher yielding accounts, or accounts with bonus interest rates.
Moreover, savings accounts are a somewhat safer way to slowly accumulate some money, especially with the backup of the Government Guarantee.
Bonus interest rates
With a savings account, bank account and the like, check whether they offer a bonus rate, over and above the regular interest rate. However, to qualify for the bonus rate, you’ll generally be required to commit to minimum monthly deposits and/or make no withdrawals.
One way to ensure you maintain a regular deposit routine is by choosing a savings account or bank account which allows ‘direct crediting’. In other words, you can automatically direct a portion of your salary to your savings account.
Higher interest rates
If you’re looking to secure a higher interest rate on a more regular basis, then you might want to consider online savings accounts. These generally offer more competitive rates as the running costs for the banks, credit unions and building societies to maintain them are lower – for example they don’t offer branch or teller services. However, if you require branch access then these accounts probably aren’t for you, as they mostly offer online and phone contact only.
Be aware of savings accounts, bank accounts or term deposits with multiple bank fees, charges or low interest. You may find these fees counteract the impact of any extra interest accrued by the savings account.
In 2012, the Australian government guaranteed all deposits in savings accounts, including savings in non-bank accounts, up to $250,000. These accounts are therefore a relatively safe and secure place to deposit your money.
Do note that cash deposit savings accounts, bank accounts and term deposits won’t generally generate the same long-term returns as a quality investment in shares or property. While savings accounts are suitable for those looking to safely secure their funds, if you are regularly withdrawing funds then a low or no fee transaction account could be a more appropriate option for you.