Young savers are big winners as interest rates surge

Young adults with savings goals may be well positioned to take advantage of rising interest rates, as a number of financial institutions offer attractive returns for this particular demographic.

As the cost of living becomes increasingly more expensive, it may be advantageous - particularly for young people - to dedicate a portion of their income to savings. This could help them chip away at their homebuyers deposit target or simply save up for something special, such as a night out on the town; that new dress; or a long weekend away.

On the back of tax season, people are re-assessing their budgets, seeking ways to invest and grow their tax returns. Banks are hoping to woo new customers, enticing youthful clients with exclusive, high-interest savings accounts.

See the table below for some of the highest interest savings accounts for young adults on RateCity’s database.

Source: RateCity.com.au Note: Monthly conditions apply for max rate.

It’s important to note that while the interest rates on these accounts are higher than most on the market, the maximum balance you can earn the highest rate on is significantly lower than those associated with savings accounts for all age groups. For example, Westpac’s Life savings account - available for those aged 18-29 - is awarding 3.25% interest (from 18 August) on balances under $30,000.

Comparatively, ING’s Savings Maximiser offers a similarly high-interest rate of 3.10% on balances up to $100,000 that outperforms most of the competition, provided customers meet all account eligibility and activity requirements.

Beyond age, there are certain conditions customers must meet each month to earn the maximum high-interest rate on these savings accounts for young adults. These can include a minimum number of account transactions, regular deposits, and ongoing balance growth requirements.

Compare some of the highest savings account rates, without age restrictions, on RateCity’s database.

Source: RateCity.com.au Note: Monthly conditions apply for max rate.

Choosing a savings account that aligns with your goals and needs involves understanding the different features and account advantages available. For example, many online savings accounts offer a bonus rate on top of the base interest rate; promotional rates are often lofty but are usually one-off offers for new customers; and despite seeming somewhat redundant, minimum deposits are sometimes required to open new savings accounts.

To better understand the ins and outs of savings accounts, check out RateCity’s handy guide.

The RBA has hiked the cash rate 175 basis points since May, from 0.10% to 1.85%. Find out why this isn’t “normal”.

While many banks raised mortgage rates this month, not all of them passed on these increases to savers. Is now the time to get a term deposit or a high-interest savings account?

Looking for more ways to save money? Discover how to make the most effective cuts to the household budget and consider alternative options to enhance your savings potential.

Remember that the best choice for you will depend on your personal circumstances and financial situation. Consider contacting a financial adviser for tailored advice.

Compare high-interest savings accounts

Compare savings accounts