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Welcome back high interest savings accounts: providers that have hiked savings rates

Welcome back high interest savings accounts: providers that have hiked savings rates

Good news for Australians trying to earn a return on their savings, the latest cash rate hike from the Reserve Bank of Australia may mean that interest rates on savings accounts could be on the way up again.

Many savings accounts are still offering interest rates close to zero. With the cash rate having increased by 25 basis points, and further hikes expected over the next two years, Australian savers may see their savings grow through interest again.

Three of the four big four banks have announced they will be increasing savings rates for new customers for specific savings accounts. Only CommBank, Australia’s biggest bank, has not announced whether it will be passing on the hike to savers yet.

Savings account providers increasing interest rates

BankRate increaseNew highest rateAccount typeDate effective
Westpac0.25%0.50%Ongoing17-May-2022
NAB0.25%0.50%Ongoing13-May-2022
St.George Bank0.25%0.50%Ongoing17-May-2022
Bank of Melbourne0.25%0.50%Ongoing17-May-2022
BankSA0.25%0.50%Ongoing17-May-2022
Macquarie Bank0.15%1.50%Standard13-May-2022
ANZ0.25%0.40%Ongoing13-May-2022

Source: RateCity.com.au. Data accurate at time of publishing, 04/05/2022.

But savers aren’t out of the woods yet. RateCity has recently warned customers to not expect their bank to pass on every cash rate hike in full to their savings account.

Sally Tindall, RateCity research director, said: “ANZ, NAB and Westpac, like other banks, are bursting at the seams with cash. As a result, the banks are unwilling to pass on the hike to all savings customers,” she explained.

RateCity research shows that since Covid-19, the big four banks cut their goal saver rates by an average of 1.27 percentage points, while the RBA cut the cash rate by only 0.65 percentage points.

These out-of-cycle rate cuts mean that savings account interest rates have a long way to go before your hard-earned next egg can compete with inflation.

High interest savings accounts

According to the RateCity database, the highest savings accounts interest rates (for adults) at the moment sit at 1.35% from ING and AMP Bank.

Often to earn a providers’ highest interest rate, customers may have to jump through some hoops and meet conditions, such as making minimum deposits or not dipping into the account.

This can be challenging for customers who have a set and forget mentality with their savings, as you may need to ensure you’re across all the conditions to earn the highest rates.

If you’re shopping around for a high interest savings account, be sure to read the fine print and product disclosure statement to ensure you can meet any conditions required to earn the competitive rate.

Company
Product

Future Saver Account (Under 35)

Real Time Rating™

4.65

/ 5
Maximum rate

3.00%*

% p.a

Base rate

0.05

% p.a

Maximum monthly interest

$39

Real Time Rating™

4.65

/ 5
Go to site

Deposit $1000 minimum monthly deposit into your linked Everyday Account and make 5 or more eligible transactions.

Company
Product

Virgin Money Boost Saver (< 18 years)

Real Time Rating™

4.33

/ 5
Maximum rate

2.60%*

% p.a

Base rate

0.05

% p.a

Maximum monthly interest

$34

Real Time Rating™

4.33

/ 5
Go to site

The maximum rate is made up of the variable Base rate of 0.05%p.a., Bonus rate of 2.25%p.a. and the Notice Interest Rate of 0.30%p.a. If you are between 14 - 17 years, no Monthly Criteria apply in order to earn the Bonus Interest Rate of 2.25%. To receive additional interest rate of 0.3%, the optional Lock Saver Feature must be enabled on your App. Provide 32 days’ advance notice to unlock your account or withdraw your money.

Company
Product

Virgin Money Boost Saver (18-24 years)

Real Time Rating™

4.33

/ 5

Winner of Best Savings Account Young Adults, RateCity Gold Awards 2022

Maximum rate

2.60%*

% p.a

Base rate

0.05

% p.a

Maximum monthly interest

$34

Real Time Rating™

4.33

/ 5
Go to site

special

Deposit $2,000 or more into your Virgin Money Go Account from an external account and make at least 5 debit card purchases, direct debit or BPAY payments in the previous month.

The maximum rate is made up of the variable Base rate of 0.05%p.a., Bonus rate of 2.25%p.a. and the Notice Interest Rate of 0.30%p.a. To receive bonus interest of 2.25%, deposit $1,000 or more into your Virgin Money Go Account from an external account, and make at least 5 debit card purchases, direct debit or BPAY payments in the previous month. To receive additional interest rate of 0.3%, the optional Lock Saver Feature must be enabled on your App. Provide 32 days’ advance notice to unlock your account or withdraw your money.

Winner of Best Savings Account Young Adults, RateCity Gold Awards 2022

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This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.

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