Top new ways to save for your holiday

Top new ways to save for your holiday

We all know that travel can be expensive, especially when you have bills or a mortgage to pay. By the time you add up your flights, accommodation and insurance costs it almost feels like there’s no money left to go out and enjoy the city to which you have travelled.

Finding new ways to come up with the cash for your holiday, and to keep costs down while you’re on vacation, is a must for every travel addict.

Here are some of the best ways to pay for your holiday necessities and still have enough money left over for those once in a lifetime travel experiences.

Saving up before you go

Money box drinking cocktail down the palm

Saving enough to go away on a trip is often the first and most difficult hurdle for cash-strapped travellers.

Incentive based savings accounts are a great way of stashing some cash for your next holiday as they tend to both require a minimum monthly deposit and discourage you from making any withdrawals.  By sticking to the account’s basic terms and conditions, you effectively sign yourself up to a relatively simple savings plan.  By doing so you are rewarded with bonus interest which can go a long way to making your trip even more memorable. 

The RAMS Saver account is a great example of an incentive based saving account.  It has some conditions in order for customers to earn bonus interest (on top of the variable base interest rate the account offers). Firstly, customers must deposit at least $200 each month.  This could be as easy as getting a portion of your salary paid into the account each month. 

Secondly, in order to be eligible for the bonus interest rate, customers must not make any withdrawals each month. This effectively makes customers think twice about whether they really need to spend money now or instead build up the spending money for their trip. Bonus interest is only payable on balances up to $500K.

Apart from the traditional savings account, new apps can help you stay disciplined and save extra cash before your big trip. An example of this is the Acorns app that can be a useful tool for savers who find it hard to stick to a financial plan.  

The app helps in identifying areas of your spending where you can cut back, and setting reasonable short and long term targets for yourself. Acorns allows you to automate how much you save by allowing you to save & invest any amount on a daily, weekly, or monthly basis.

Another key feature of Acorns that helps relieve the stress of saving is Round-Ups. Round-Ups takes any transaction you make on your credit or debit card, rounds it up to the nearest dollar and invests the change into your portfolio. By linking saving to spending, it is a great way of showing that you can save without affecting your lifestyle.

Saving on insurance

Europe map and airplane in cappuccino (made of cinnamon). Travel concept. Travel agency

Travel insurance is a must for any holiday. While it will involve an initial cost, the cost of not having insurance if something goes wrong could be infinitely higher.

Online travel insurance specialists, InsureandGo, suggest buying directly from a specialist to help cut out middle man fees on travel insurance. Buying your insurance direct from an online supplier can work out cheaper, but make sure you shop around for cover that is appropriate for you – not just cheap.

It’s also recommended to read the terms and conditions and take note of any inclusions and exclusions on your policy so you know exactly for what you are covered. This should help you avoid running into any surprise costs down the track.

While most policies will cover you for standard items – like medical/hospital and emergency, trip cancellation, liability, baggage. Before you purchase your insurance think about what other unique areas you will need cover for.

Will you be doing any risky sports or activities that required extra cover? Perhaps you taking an expensive camera or renting a car? These are just some of the things that you should take into consideration when choosing your cover so you are not left out of pocket if something goes wrong.

Another tip is to look out for discounts and promotions. Just like your favourite clothing store, travel insurers also offer coupon and discounts. If you’re a regular traveller, it may be worth signing up to their newsletters or checking out their social media pages is a great way to find out about these limited time offers.

Saving on accommodation

Small dog maltese sitting in the suitcase or bag wearing sunglasses and waiting for a trip

For those looking to pay less for accommodation and more for experiences, house and pet sitting is the ideal option. By providing free pet care when you travel, you can enjoy the opportunity to spend time with a pet and live like a local in the places you visit.

You could reduce the cost of your trip by over a third and help pet owners find peace of mind while they are away from home. Instead of checking into a hotel you can stay for free in homes across Australia and all over the world.

This style of accommodation is an experience in itself and gives you the chance to make connections with local people, discover off-the-beaten-path destinations, and take advantage of the companionship having a pet can provide. By organising house and pet sitting stays through a community like TrustedHousesitters, for less than the cost of one night in a 3-star hotel, you could save thousands of dollars on your holiday accommodation.

TrustedHousesitters is an online community of pet lovers who engage in a mutually beneficial exchange to ensure all members can find the freedom to travel. Providing a simple solution to a universal problem, they help home and pet owners connect with caring, verified sitters who offer free pet care in exchange for a free retreat, because they want to spend time with pets when they travel.

Saving on the road

Three tourist friends consulting gps on smart phone in a touristic place with a monument in the background

Apps are not only for saving before your trip, they can also make life a lot easier when you’re out on the road. One way that apps can make your travel experience better (and cheaper) is by helping you avoid those “tourist trap” restaurants that give you inauthentic food for double the price of a true local feed.

Using the Townske app, you are able to easily uncover the places that locals go to again and again. These are the places that are doing amazing things, providing amazing experiences and are often at or below prices of more touristy places. With Townske, you could improve you travel experience and have the opportunity to enjoy the true richness of cities. 

Another hot tip that could see you saving thousands over your travels is getting access to an International Student Identity Card (ISIC). Full time students, teachers and anyone under the age of 31, qualify for one of 3 lifestyle and discount cards.

First established in 1953, all bona fide students over the age of 12, regardless of their nationality, race, gender or religion can purchase an ISIC card at an affordable price. Via one single card, ISIC students gain preferential and discounted access to products, services and experiences relevant to all aspects of student life, from software licenses, cinema access to bookstores, public transport, cafés and eateries and much more.

Whether you’re staying put in Australia or heading off on an overseas adventure, these internationally recognised discount and lifestyle cards are the real deal when it comes to savings.

ISIC gives you a choice of up to 42,000 lifestyle and travel benefits in over 133 countries, including more than 5,000 in Australia and New Zealand. For example, you could get 20 per cent off your meals at over 2,500 restaurants, cafes and takeaway outlets across Australia and New Zealand.

There are also exclusive discounts on flights and other travel products through STA Travel and negotiated discounts on train, bus, tram & ferry tickets around the world. There is an ISIC app that can be downloaded to help you check for discounts while you’re on the go. 

Looking for a financial product to offer you the best of both worlds, both at home and abroad? ISIC cards are an exciting collaboration and a great way for the students and youth to make their hard earned travel dollars last a little further. The global benefits on the ISIC card together with the Westpac Choice account, ensure students and youth can’t go wrong if they are looking for flexibility, savings and a great way to start their adventure.

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

Advertisement

RateCity
ratecity-newsletter

Money Health Newsletter

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

By signing up, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Today's top savings accounts products

Advertisement

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.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit ingdirect.com.au.

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

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 a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

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)

What are the requirements for opening Commbank multiple savings accounts?

Existing Commbank account holders can open additional accounts online You can open multiple savings accounts with Commbank to meet various goals like a down payment for a home or buying a car. 

To open an account, you’ll need the following:

  • An Australian residential address
  • To be 14 years or older
  • A Tax File Number (TFN) or TFN exemption.
  • Tax residency details

If you’re not a current Commbank account holder, you’ll need an Australian driving licence, birth certificate or passport and Medicare card. You may also have to visit a branch if your identity cannot be confirmed online. 

Do banks run credit checks on savings accounts?

When you apply to open a new savings account, some providers may conduct a credit check, meaning that they will ask a credit bureau for your credit history. This isn’t always the case on savings accounts though and depends on the provider, as you aren’t borrowing money. 

As you are opening a savings account and not borrowing funds, this credit check is considered a soft inquiry and should not affect your credit score. If the bank has run the credit check, you can often still open a savings account even if you have a poor score, provided you meet other requirements. 

What are the two types of NAB locked savings accounts?

With a locked savings account in NAB, you can earn bonus interest and learn financial discipline. NAB offers two types of locked savings accounts, each with their own terms and conditions.

The NAB Reward Saver account pays a variable base interest rate of 0.05 per cent per annum and a bonus interest of 0.55 per cent. You’re eligible for the bonus if you make a minimum of one deposit on or before the second last banking day and have no withdrawals in the month.

Meanwhile, the NAB iSaver account provides 0.05 per cent as the standard base interest rate and a fixed bonus margin of 0.55 per cent during the first four months from the date of opening the account. You can park your cash in the account and enjoy unlimited monthly transfers between linked daily bank accounts without impacting the interest rate.

Should I open multiple savings accounts with UBank?

UBank offers customers an opportunity to make the most of their savings by opening multiple savings accounts. Having multiple savings accounts with UBank may be ideal for savers tracking different goals in separate accounts. 

It’s important to note that to earn bonus interest, you will still need to meet the conditions of the UBank savings account every month. If you don’t make these deposits, you will receive the standard interest rate, which is typically lower. 

Keep in mind that you won’t earn bonus interest on your UBank savings account in the month an account is opened and if you open multiple savings accounts with UBank, you'll start earning any bonus interest the following month. 

It's also not yet known how long the special interest rate will hang around for, so please check with your bank for more information. 

What are the requirements of an ING Bank locked savings account?

An ING bank locked savings account - also called a term deposit - offers you interest in exchange for holding your money for a period of time.

The terms offered include as little as 90 days or as long as two years. Generally, the longer you lock your money away, the higher the rate of interest. 

The minimum deposit amount for an ING locked savings account is $10,000. 

To be eligible to apply, you must: 

  • Be an Australian resident for tax purposes
  • Be aged 13 years or older
  • Hold the account for personal use (ING offers business term deposits as a separate product). 

 

Do I have to claim interest on my savings account?

When you lodge your income tax returns, you must include in the documentation all your sources of income, including bank interest. Your bank will report any interest you earn on the funds in your savings account to the Australian Tax Office (ATO). When the ATO then compares this information with your tax returns,  you also need to have mentioned the interest earned. If there is any discrepancy, you’ll receive a letter from the ATO. 

Avoid this situation by ensuring you receive your bank statement with interest noted. Then declare the interest in your tax returns and pay the tax that’s applicable based on the income tax rate.

You only need to claim your share of the interest earned for joint accounts. If you manage an account for your child and receive or spend money via this account, you will also need to report any interest earned from said account.

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.

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.