How to boost your savings

How to boost your savings

When it comes to saving, every tiny amount you put away can make a huge difference. There are many benefits to saving – planning for the future, having access to money in case something unexpected happens and achieving your financial goals among others.

To help you achieve those goals faster, here are some effective tips on boosting your savings.

Revert to cash

We may be rapidly moving towards being a cashless society, but one of the most effective ways to reduce unnecessary spending and boost your savings is to go back to using cash, according to Dominique Bergel-Grant, director of Leapfrog Financial and a committee member of the Association of Financial Advisers’ Inspire initiative.

“[Visa] payWave is a great technology but we all lose track of where the money is going – we don’t even notice where the money is going until we get the credit card statement,” Bergel-Grant says.

For spendthrifts who struggle with the discipline of saving, Bergel-Grant recommends withdrawing a set amount of cash to last you for an entire month then handing over your debit card and credit cards to a trusted friend to prevent you from spending more than the monthly budget. “My clients see the benefit of this approach, although it can be a bit painful by the time you get to week three,” she says. “Try monthly first and once you develop the discipline, go down to withdrawing cash for a fortnight then weekly.”

Save windfalls

What do you do with tax returns, Medicare reimbursements, bonuses from work or the odd inheritance? Most of us are likely to spend it, but windfalls such as these can be a great way to boost your savings and earn you more interest along the way. And because you won’t have to make any spending sacrifices to put windfalls into your savings, you won’t even notice you’re doing it.

Maximise interest

If you don’t already deposit your savings into a high-interest savings account, research your options to maximise the interest you earn. At the time of writing, RateCity lists savings accounts with rates up to 4.6 percent interest.

Once you have saved a lump sum, you could also consider moving your savings into a term deposit and start earning a decent amount in interest straight away, she says.

Review subscriptions

You may be paying thousands of dollars a year on things you don’t use or could do without. Whether it’s an unused membership, mazagine subscriptions, website memberships or pay TV, it pays to regularly review all subscriptions and memberships and cancel any unnecessary ones. “Look at all direct debits coming out of your account and see what you need and what you can cut,” Bergel-Grant advises.

Minimise takeaway meals

Eating out is fun and no one is asking to you give up your social life. But grabbing breakfast on the way to work and a daily takeaway lunch can have more impact on your hip pocket than you realise. Let’s say you spend a modest $5 a day on a morning coffee and raisin toast, and $10 a day on lunch while at work. Over a 48 weeks of the working year, that comes to $3600 you could be adding to your savings instead.


Did you find this helpful? Why not share this article?



Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy


Learn more about savings accounts

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.