The ultimate savings account checklist

The savings account checklist

You may have made the decision to move your extra money into a savings account but don’t congratulate yourself just yet.

At first glance it may appear that all savings accounts are created equal, they all help you work towards your goal by providing interest payments on your total.

But don’t be fooled, there are a few key features to think about when choosing the best option for your needs. Use the following checklist when comparing accounts to make sure your money will be working hard for you:

Interest rate

A savings account is different from an everyday or transaction account in that its main goal, as the name suggests, is to help you save money. As such, they usually offer higher interest rates than a transaction account to help you grow your savings faster.

The best way to make the most of this advantage is to look for a high-interest savings account that calculates interest daily and pays monthly. This enables you to earn interest on your interest. The highest interest rate listed on RateCity is 3.6 percent with ME Bank which is only applicable if you open a transaction account with ME as well.

Keep in mind when looking for accounts that many banks offer higher introductory interest rates for four or six months to attract new customers, with the rate reverting to a standard variable interest rate after this period. It is important to check what the base rate will be once you are past the introductory stage so you know if you’re really getting a good deal.

Also keep an eye out for accounts that have special offers such as bonus interest when you make a deposit but no withdrawals in any given month.


Everyone knows you can achieve your financial goals faster if you are paying zero fees on your savings.  Fees on savings accounts are practically a thing of the past now days with online access cutting costs for banks and the savings being passed on to the customer. If you are paying any fees on your account it is certainly time to switch.

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Some savings accounts require a minimum or maximum balance, and you may need a minimum opening balance. On top of these conditions some accounts also require minimum and regular deposits to be made generally on a monthly basis. If you are employed casually or can’t guarantee your ability to make regular deposits you may be forfeiting the high interest rate that you signed up for. Keep this in mind when comparing accounts and choose one that not only has a high interest rate and no fees but that suits your lifestyle and income.


Considering their purpose is to help you save, some savings accounts restrict access to your money to encourage you to leave them untouched. If easy access is important to you, look for an account that allows you to make withdrawals whenever you like. Online-only banks generally do not offer ATM access, so you will need to link your savings account to a transaction account for transfers and access to your money.


The Australian Securities & Investments Commission recommends ensuring that your chosen account is offered by an Authorised Deposit-Taking Institution (ADI). ADIs are regulated by Australian Prudential Regulation Authority (APRA), which means your money is safer in their hands. You can check APRA’s list of ADIs online for added safety if you are looking to take out an account with an institution you are unfamiliar with. All accounts listed on the RateCity website are offered by ADIs. 

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Learn more about savings accounts

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 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

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.

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.

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 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 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.

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.

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.

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.

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 do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

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.