RaboDirect savings accounts
A savings account is an account set up with a bank or credit provider for consumers to build up their savings. As an incentive, the accounts usually offer an interest rate to consumers for keeping their money there; this interest can be paid monthly or annually and is based on how much is in the account.
When a consumer deposits money into their account with RaboDirect or any other institution, they are in effect lending it to the bank or credit provider. The bank or credit provider can then use that money to issue loans and fund other financial services. The reward for lending money to the bank or credit provider is the interest rate.
The interest the bank pays compounds, meaning that interest is earned on whatever is in the account including any interest previously received.
Consumers are usually free to withdraw their money at any time but the idea of a savings account is to keep the money in the account, letting the amount grow.
Interest rates vary between RaboDirect and other institutions, and may also change depending on other factors. The account’s opening balance can be one factor determining the interest rate awarded. The frequency of deposits and withdrawals can also determine the interest rate given by the lender. Ideally, with savings accounts, consumers should aim to make regular deposits into the account and keep withdrawals at a minimum.
What is RaboDirect?
RaboDirect is part of the Dutch Rabobank Group, which was founded in 1898. RaboDirect offers saving accounts and other banking products as well as loans and superannuation.
RaboDirect is backed by the Australian government’s Financial Claims Scheme, which guarantees consumers’ funds in authorised deposit-taking institutions up to $250,000.
Where can you find RaboDirect savings accounts?
RateCity provides product information on many of Australia’s leading banks and credit lenders, including RaboDirect.
Savings account information and comparison tools can be found on the savings account page. For a full overview of the savings accounts including interest rates and fees, click through to the product page.
What should you look for in a savings account?
Whether you opt for RaboDirect or another lender, it’s important to find an account that meets your individual needs. The right savings account for one person may not be right for another. It is important to consider whether a savings or transaction account is needed. A transaction account may be better suited for someone looking for an account to manage everyday expenses and purchases, while a savings account may be better for individuals who are looking to save money. Many accounts do not come with a debit card, so a linked transaction account may be required for transactions made outside banks and ATMs.
All things being equal, you want to get the highest possible interest rate on your savings account.
A consumer’s access to money is also important, so the number of ATMs and branches offered by the lender should be considered. Many lenders provide both phone and internet banking for savings accounts, which can make depositing and withdrawing more convenient.
What to look out for when setting up a savings account
Before an individual applies for a savings account with RaboDirect or any other institution, it is important to check that the account will meet all of their needs. The facilities offered by savings accounts can vary from lender to lender. For example, if one individual likes using cheques to transact money, it is important they ensure that facility is available on the account they are applying for.
Savings accounts can also come with costs, so it’s important to check the fee structure before applying. A common cost associated with savings accounts is a staff-assisted fee, which is charged whenever a staff member has to assist with a transaction. This normally applies to in-branch transactions, but can also be applicable to phone banking. If an individual likes to make over-the-counter deposits and withdrawals, an account with staff-assisted fees may not be suitable.
When looking for a savings account, it is important to consider if there are any terms or conditions attached to the interest rate payable. Many savings accounts offer a high introductory rate to entice consumers; but this rate may only last a few months before the standard interest rate takes over. Introductory rates are generally much higher than normal interest rates so it is important to check whether the rate offered will last or is just part of a temporary deal.
Many savings accounts have conditions attached to the interest rate; a common example of this is a withdrawal limit. Some accounts allow a limited amount of withdrawals to receive the full interest rate; if a customer makes more withdrawals than the set amount they may lose their interest rate. Similarly some lenders have deposit minimums, which specify that customers make a certain number of deposits a month to receive interest. The amount deposited can also be a prerequisite to receive a bonus interest rate; many accounts have minimum deposit requirements.