October 22, 2010
When it comes to helping you save, more financial institutions are upping the ante as they implement new ways of attracting customers to "save and win".
Save to win deposit accounts
For instance the Bank of Queensland (BOQ) announced that from November 15, customers can open a save to win deposit account, which gives customers the chance to win part of $30,000 in cash prizes each month with a major prize draw of $20,000.
To be eligible for the draws customers must maintain a balance of $250 in their account each month, then every dollar over $250 constitutes one entry to win.
At this stage it is unknown what the interest rate will be but BOQ managing director David Liddy says he is confident it will have a strong take-up in the savings account market.
"We expect the product to be extremely successful," he said, "as similar products have seen significant success internationally, and the prize pool will continue to grow as more people open save to win accounts."
Save to win accounts are designed as an incentive to help people save as they usually require a minimum balance each month in order to enter the draw. Some have argued this lottery-style of banking will encourage gambling.
"I cannot believe the Bank of Queensland is trying to turn itself into a casino," Senator Nick Xenophon, an advocate for anti-gambling, told the Sydney Morning Herald. "These new accounts will make the Bank of Queensland wealthier, and investors poorer."
These style of accounts are not new; they have been used abroad for many years. For instance, Westpac in New Zealand offers a save and win savings account with 0.25 percent interest, no monthly fees, free deposits and a chance to enter save and win draws. You must deposit at least $10 during the prize draw month to be eligible and have an average monthly balance of at least $100. Every $100 of your balance is another entry - a $700 balance means seven entries.
Earn more in interest with online accounts
Be aware, however, that while these types of accounts may seem attractive at first, their interest rates are usually much lower than other online savings accounts and there's a good chance you won't win the prize.
For instance, one of the best online savings accounts listed on RateCity offers an interest rate of 6.51 percent by UBank. If you deposited $500 into this account and continued depositing $200 each month through an automatic savings plan (a condition of the account) you would have saved more than $3000 by the end of one year.
And because many online savings accounts state that you must deposit a minimum account each month, you will still save but you will be able to earn more in interest at the same time - a much safer bet on your winnings!
UPDATE 21 January 2014: The Bank of Queensland no longer offer save and win savings accounts.
If you are interested in great savings accounts that reward you with high interest rates for regular repayments, instead of chance prizes, visit our savings accounts comparison page to compare some of Australia’s best accounts. Alternatively the table to the right is displaying some of the best high interest savings accounts available today.