Find and compare Australia's best flexible savings accounts

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1.35%

Intro 4 months then 0.35%

0.35%

Citi

$5.6

$128.9

2.95

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Learn more about savings accounts

The easiest way to find out the best flexible savings accounts on the market is to conduct an online search (see above).

A comparison website, like RateCity, is a great way to research flexible savings accounts, because it gives you the chance to compare apples with apples.

Flexibility comes in many different shapes and forms. Examples include:

  • Branch access
  • ATM access
  • BPAY facility
  • EFTPOS facility
  • Cheque facility

Other examples of flexibility can include options around minimum opening deposits, minimum monthly deposits and maximum monthly withdrawals.

The whole point of flexibility is that each person is unique, so what suits one person won’t suit another. Another point worth mentioning is that all of us need different things at different stages of our life. So an account that suits us today might not be suitable tomorrow, and vice versa.

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Interest rates are also important

Apart from flexibility, you might also want to take a close look at interest rates before signing up for a savings account.

There are hundreds of different savings accounts on the market, so there is also a lot of variety in the interest rates available. In fact, the difference between the account with the lowest interest rate and the account with the highest interest rate can be as high as three percentage points.

Don’t forget that interest rates come in several different flavours:

  • Base interest is the minimum interest rate you’ll be paid
  • Maximum interest is the interest rate you’ll be paid if you satisfy certain conditions
  • Bonus interest is the interest rate you’ll be paid for a limited period (usually after opening a new account)

Please note that some savings accounts pay just the one interest rate, so for those products, the maximum rate and bonus rate aren’t applicable.

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Savings accounts vs other investments

One of the great features about savings accounts in general is that they’re inherently flexible financial products. That’s because they’re easy to open and easy to liquidate.

Investing in, say, equities is less flexible, while investing in real estate is less flexible still.

Of course, that flexibility comes at a cost, because savings accounts tend to deliver lower returns over the long term than equities and real estate.

Still, you don’t have to make an either-or choice. You can use a savings account as a source of emergency funds, filling it with enough money to cover, say, three to 12 months of expenses. You could then put any surplus funds into higher-yielding investments, such as equities and real estate.

Financial Claims Scheme

Another benefit of savings accounts is that they’re covered by the federal government’s Financial Claims Scheme.

The Financial Claims Scheme, which was established in 2008, protects deposits in banks, building societies and credit unions if one of them collapses.

Each account holder at each institution is protected for up to $250,000. So if, say, you had $350,000 in one account and the institution collapsed, the first $250,000 would be protected but not the other $100,000. However, there is a way around this problem – divide the $350,000 between multiple accounts so that no one account has more than $250,000.

Frequently asked questions

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

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.

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 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.

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.

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. 

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.

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 I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

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)

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.