Whether you’re saving for a holiday, house renovations, a wedding or a new car, there are many exciting reasons to open a savings account.
Achieving your savings goals can feel like an uphill battle, and the urge to dip into them is always there, but there are many ways to make the journey a little easier.
Online savings accounts
It’s never been easier to save thanks to online savings accounts. Long gone are the days of long bank queues; online savings accounts allow 24/7 access.
Online savings accounts are a competitive choice when comparing different savings tools. Not only do they offer higher interest rates and lower fees, they encourage you to save by rewarding regular deposits, minimal withdrawals and keeping your balance at a certain amount.
Whether you’re teaching your children financial literacy or saving for a holiday, online savings account can help you through any savings situation.
Savings Account Tips
- Set monthly savings goals
If you’re looking to save $5,000 in the next year or two, the thought of that big number can be overwhelming. However, if you break down those savings into easy monthly deposits it can take away a lot of the stress around “how can I possibly save that much money!”
Online savings accounts typically reward regular deposits through higher bonus rates. If you set a budget and save $200 a month, you’d have $5,000 in two years without any help, but if you accrue higher interest through regular monthly deposits, that time frame will be even shorter.
- Different saving accounts for different savings goals
You can use different savings accounts for different savings goals.
If you’re hoping to save up for an emergency fund, a high interest savings account may be a competitive option for you. Use the RateCity online comparison tool to find one that suits your needs.
You can teach your children great money habits early through a children’s savings account. Help them to do their own online comparison research to find a competitive savings account for their pocket money. If you develop their financial literacy early, they’ll find it easier to navigate through complex financial products and strategies later in life.
- Use online comparison tools
You wouldn’t buy the first house or car you saw without comparing a few options first, and the same is true for savings accounts.
Online comparison tools are the most effective way to ensure you choose the most competitive savings account for your individual needs. Simply enter a few details, including your initial deposit, your monthly deposit and your saving period, and you can compare account types from Australian banks and lender.
And while it may seem that there couldn’t be that many differences between savings accounts, you’d be surprised how many traps you can fall into if you’re unprepared.
When choosing your new savings account, it’s important to use online comparison tools to examine the following:
- What is the interest rate?
It may seem like “the higher the rate the better”, but you’ll also want to look for a savings account with a rate that is higher than the Consumer Price Inflation (CPI) rate. Ensure that the advertised interest rate is not just an introductory rate that may drop to a lower rate after a set period.
- Can I earn promotional and/or bonus rates?
Lenders will use promotional and/or bonus rates to incentivise customers to not only join with them, but reach their savings goals. This may be through higher interest rates when you meet a minimum deposit amount each month, or a higher interest rate for the first six months of the account.
- What are the fees involved?
There are plenty of zero fee options available, so use online comparison tools to ensure you’re not paying them. These fees include monthly fees, ATM withdrawal fees and electronic transaction fees.