What are the best regular savings accounts on the market? As with all financial products, beauty is in the eye of the beholder.
Everybody is a unique individual with unique financial circumstances and unique preferences. So the best regular savings account for one person won’t necessarily be the best regular savings account for another.
Another important point is that there are dozens of lenders offering hundreds of different savings accounts, so the market is in a constant state of change. In other words, just because you consider a particular product to be the best regular savings account on the market today, doesn’t mean it will retain this title tomorrow.
How to find the best regular savings account
As a result, it’s important to shop around. A quick and easy way to do that is to use an online comparison search tool, such as RateCity’s (see above).
This will allow you to compare savings accounts by interest rates and fees. It will also give you the chance to filter by a range of features, including:
- ATM access
- Branch access
- BPAY facility
- EFTPOS facility
- Internet facility
- Cheque facility
- SMSF availability
Again, the savings account market is in a constant state of change, so market research shouldn’t be a one-off activity. Instead, you should take the time to study the market every year or two. After all, doing an online search is easy, and switching savings accounts is also a relatively straightforward process.
Use a calculator to crunch the numbers
Make sure you use RateCity’s savings accounts calculator as part of your research, because this will clearly reveal how much money you’d be able to save under different savings scenarios.
To illustrate the point, imagine a hypothetical consumer named Peter, who decides to conduct his own search for the best regular savings account. Peter currently has a savings account that pays 1.5 per cent interest. He opened the account 12 months ago and has built up his savings to $10,000.
After doing some online research, Peter finds a savings account that pays a maximum interest rate of 3 per cent – provided he deposits at least $200 per month and makes no withdrawals. Peter is confident he can meet these conditions, so he moves his $10,000 to the new savings account.
Here’s how his balance would compare under the old account and new account:
|Year||Old account||New account||Difference|
How the government protects savings accounts
During the Global Financial Crisis, people started worrying about the stability of local lenders following a series of high-profile international bank collapses.
The federal government responded in 2008 by creating the Financial Claims Scheme, which protects the first $250,000 of each individual deposit at each bank, building society and credit union incorporated in Australia. So in the unlikely event of a collapse, the government would reimburse you for up to $250,000 if you lose the money in your savings account.
Please note that the Financial Claims Scheme can only be activated by the government – and this would only happen if the lender failed and could no longer meet its financial obligations.