What is a savings account?
Chances are you’ve been told sometime in your life that having a savings account is important. While you tend to see these accounts bundled within banking apps, they can often stand alone as their own thing. So how do we define them?
Unlike everyday accounts you use to pay bills or cover expenses, a savings account allows you to deposit money for safekeeping for future needs while earning some interest. This interest can earn interest on itself too, which is called compound interest.
But why should you get one? And how do you pick one that fits exactly what you need? Below we have answered some of those pressing questions.
Reasons to use a saving account
A savings account is a good way to keep your money safe while also growing it. Part of the reason it’s safe is that deposits up to $250,000 are guaranteed under the Australian government's financial claims scheme (FCS).
Savings account goals can differ widely depending on your financial situation. For instance, you may be working towards an emergency fund or sinking fund. Alternatively, you may be saving money as a deposit for a home loan.
Essentially, some of the main reasons you’d consider a saving account include:
- Preparing for emergencies
- Buy big-ticket items or goals
- Reduce the temptation to spend
- Help grow your credit score
What should I look for in a savings account?
Choosing a savings account is a personal endeavour that depends on your individual needs and situation. However, there are some pretty universal things that a good savings account should have. Check below to know what to keep in mind when looking for a new savings account.
No monthly fee:
- It is rare to find a savings account that charges a fee these days. However, there could be things like minimum requirement fees, withdrawal penalties and transaction fees tied to an account. Keep in mind though that your savings account may be connected to a transaction account that does require a fee, so it’s good to check.
A good ongoing interest rate:
- One of the main points of using a savings account instead of a regular everyday account is that you’ll earn more interest. So make sure to look for an account with a high interest rate. Just don’t forget that savings accounts usually have a variable interest rate so they are subject to fluctuation and change.
Withdrawal flexibility:
- Most savings accounts let you withdraw money as you like, but that’s not always the case. 48 of the savings accounts in Mozo’s database will drop the bonus offers rate if you withdraw in the month.
A linked transaction account:
- Typically savings accounts offer a linked everyday transaction account, and some even require them. While some savings accounts require a transaction account with the same bank, others will let you link to an account with any bank.
What are some savings account options?
There are many savings account options available in Australia, each with pros and cons. Below is a quick rundown of the main savings options you’ll find in the banking world.
Bonus saver
- Who doesn’t love being rewarded? With bonus saver accounts you get conditional bonus interest rates if you meet specific criteria. This could be a minimum monthly deposit, not making a withdrawal in a month or having a certain balance in the account.
Long term savings
- If you’re looking for a place to keep your rainy-day fund, then a long term savings account could be ideal for you. These accounts tend to have high ongoing interest rates, so you could leave your savings there for a couple of years. Alternatively, you could look into term deposit accounts which lets you lock in a rate for a fixed period of time.
High interest
- High interest savings accounts offer some of the best rates around and could help to grow your money stash. Most of these accounts tend to offer fee-free withdrawals, but keep in mind that some require you to maintain a minimum balance or make a monthly deposit of a certain amount.
Kids account
- It’s always a smart move to get your kids to start saving at a young age. Generally, kids saving accounts are for those under 18, but some go up to 25 years of age. Parents have full control of the account until the child is 16. Kid accounts don’t come with too many restrictions and tend to offer fun graphics and charts to keep little saver motivated.
If you are looking for the cream of the crop in savings accounts, check out the Mozo Expert Choices Awards for Bank Accounts. If you want to get started looking for your new savings account check out our savings account comparison chart below and get saving.
Savings Accounts Comparison Table - last updated 19 April 2024
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Mozo experts choice awards won:
- Kick Start Savings - 2024
High Interest Savings Account
5.75% p.a. (for $0 to $250,001)
4.40% p.a.(for $0 to $250,001)
Yes up to $250,000
Bonus rate for the first 4 months from account opening
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
CompareCompareHigh Interest Savings Account
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
- Maximum rate
- 5.75% p.a. (for $0 to $250,001)
- standard interest rate
- 4.40% p.a.(for $0 to $250,001)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening, reverting to standard variable rate. Rate shown is for Personal customers and is subject to change. Different rates apply to Business/SMSF customers.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Rabobank High Interest Savings Account
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Savings Account
5.35% p.a. (for $0 to $250,000)
4.75% p.a.(for $0 to $1,000,000)
Yes up to $250,000
Bonus variable rate is available for the first four months.
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first four months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Macquarie Savings Account
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Reward Saver Account
5.25% p.a. (for $0 to $1,000,000)
0% p.a.(for $0 and over)
Yes up to $250,000
Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.
Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.
CompareCompareReward Saver Account
Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.
- Maximum rate
- 5.25% p.a. (for $0 to $1,000,000)
- standard interest rate
- 0% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.
- Access
- ATM, EFTPOS, Visa Debit, Cheque book, BPay, Branch access, Phone banking, Internet banking, Bank@Post
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the IMB Bank Reward Saver Account
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Mozo experts choice awards won:
- High Interest Savings - 2024
AMP Saver Account
5.40% p.a. (for $0 to $250,000)
1.20% p.a.(for $0 to $5,000,000)
Yes up to $250,000
Enjoy a bonus rate when you deposit at least $1000 per month with the AMP Saver Account.
No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.
CompareCompareAMP Saver Account
No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.40% p.a. (for $0 to $250,000)
- standard interest rate
- 1.20% p.a.(for $0 to $5,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Ongoing total variable bonus rate of up to 5.40% per annum applies if customers deposit $1,000 in the previous month. Available only on balances up to $250,000.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Ongoing total variable bonus rate up to 5.40% p.a. is earned on the balance the month after you deposit $1,000 and is paid the following month, on balances up to $250k. Max balance per customer name is $5 million.
Read our Mozo Review to learn more about the AMP Bank AMP Saver Account
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Savings+Bonus
5.00% p.a. (for $0 to $250,000)
2.00% p.a.(for $0 to $250,000)
Yes up to $250,000
Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.
CompareCompareSavings+Bonus
Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.
- Maximum rate
- 5.00% p.a. (for $0 to $250,000)
- standard interest rate
- 2.00% p.a.(for $0 to $250,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $5.00
- Maximum rate conditions
- Minimum $100 monthly deposit and no withdrawals to earn bonus interest.
- Access
- -
- Minimum balance
- $1.00
- Other restrictions
- -
Read our Mozo Review to learn more about the First Option Bank Savings+Bonus
Your selected savings accounts
Your selected savings accounts
Your selected savings accounts
Your selected savings accounts
Your selected savings accounts
^See information about the Mozo Experts Choice Savings Account Awards
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