Whether you’re a fan of the humble savings account, or prefer to lock away your nest egg with a term deposit, it’s safe to say that the latest cash rate hikes are mainly benefiting Australian savers.
After years of near-zero interest rates on savings accounts and term deposits, savers are finally experiencing the benefits of a rising rate environment. While it’s not ideal for many Australians - homeowners in particular – a higher cash rate should mean that you gain a greater return on your savings.
In fact, RateCity research shows that there are nine savings accounts on our database offering high interest rates above 3%, and four term deposits offering rates above 4%.
Keep in mind that with more cash rate hikes predicted for 2022, many savings account rates could soon enter the ‘4% club’ as well. For now, the majority of above-4% rates are found through term deposits.
Future Saver Account (Under 35)
Young adults can enjoy one of the most competitive interest rates on a savings account for their nest eggs.
5.40%*
p.a
0.05%
p.a
- High interest young adult savings accounts
It’s worth noting that some of the most competitive rates for savings accounts are being reserved for younger Australians. For example, Bank of Queensland is offering the highest rate on our database of 4% for its Future Saver Account, for those aged 18 – 35.
Younger Australians may be able to utilise these higher rate offerings to grow their savings into a first home deposit, or purchase a new car.
| Savings account provider | Ongoing Rate |
| Bank of Queensland (under 35) | 4.00% |
| Westpac (18-29 year olds) | 3.50% |
Source: RateCity.com.au. Data accurate as of 30/09/22
- High interest adult savings accounts
These are some of the highest interest rates on offer from savings account providers for all adults. Some accounts may come with conditions that need to be met to earn the highest rate, such as a minimum deposit each month. Be sure to read the fine print before you consider switching.
| Savings account provider | Ongoing Rate |
| Virgin Money | 3.60% |
| ING | 3.60% |
| AMP Bank | 3.60% |
| Bank of Queensland | 3.35% |
| MyState Bank | 3.20% |
| Rabobank | 3.15% |
| RACQ Bank | 3.10% |
Source: RateCity.com.au. Data accurate as of 30/09/22
- High interest term deposits
If you prefer the security of locking away your funds in a fixed term deposit, then the higher rate environment could also benefit your nest egg. If your current term deposit is reaching maturity, or if you’re looking for a competitive option, it may be worth comparing the current high interest rate term deposit leaders on our database:
| Term deposit provider | Interest Rate | Term (years) |
| Judo Bank | 4.85% | 5 years |
| AMP Bank | 4.45% | 5 years |
| Macquarie Bank | 4.10% | 4 and 5 years |
| Rabobank Australia | 4.20% | 4 and 5 years |
Source: RateCity.com.au. Data accurate as of 30/09/22
Why you must compare your savings options
You may believe that savings account and term deposit providers have to pass on a cash rate hike in full to these products, but this is unfortunately not the case. It is still up to the provider’s discretion how it chooses to pass on a cash rate increase.
In fact, many major banks have not passed on interest rate hikes to all of their savings’ products. Some have instead opted to increase some savings accounts and not others, or create a new higher-rate term deposit option. For example, following the September cash rate hike of 50 basis points, ANZ revealed it would be increasing rates for its new ‘Plus Save’ account by only 30 basis points, and not increasing its Online or Progress Saver accounts.
Big four bank savings rates – September RBA increases for existing customers
Source: RateCity.com.au
If you’ve not compared savings account interest rates in a while, you may be shocked to discover your rate is not as competitive as you thought it was. And if you have one or more term deposits with funds locked away at a lower interest rate, it may be time to check if your provider is still offering the biggest bang for your buck.
Be sure to keep in mind that there’s more to any saver product than the interest rate offered. Be sure to compare factors like the fees charged, or if the provider works on a platform you prefer, such as being app-based only, or having a branch nearby.
