Home loan rates are up, but so are savings accounts! Is it time to switch?

Collage of hands giving thumbs up about a rising graph line.

Whenever the Reserve Bank of Australia (RBA) lifts the official cash rate, lenders and banks take it as a cue to hike their variable interest home loans, too. But while they’re normally a little slower to do the same with savings accounts, we’re finally beginning to see some welcome rises.

So if you’re stressing over the cost of housing finance and looking for ways to save, here are some amazing banking options to check out.

Term deposits

Piggy banks in ascending order of bigness, like term deposits.

While no investment is 100% risk-free, term deposits make a pretty safe bet. Offered by most Australian banks and credit unions, a term deposit is basically a high interest savings account you agree not to touch or make withdrawals on for an agreed period of time. Afterwards, you get your money back with heckin’ high interest (unless the term rolls over – pay attention to the fine print!)

How does it work? Once you’ve found a term deposit offer you like, simply tuck a minimum sum of money away in the deposit for a locked-in term (usually between one month to five years), then watch it accrue interest at a fixed rate. This interest can be paid monthly or at the end of your term when your deposit “matures”. Typically the longer the term, the better the interest rate. 

Like any financial product, term deposits come with plenty of pros and cons, but if you have a nest egg you don’t mind not touching for a while, they can be a great investment opportunity.

Looking for the best term deposits? Check out the 2022 Mozo Experts Choice Term Deposits Awards.

For the highest rates in our database, head over to our monthly term deposit recap.

Offset accounts

Collage of a hand dropping a speech bubble into a piggy bank.

An offset account is essentially a bank account linked to your mortgage. You can deposit your monthly salary, make debit transactions, and accrue interest like a normal savings and transaction account, but this one has a pretty useful perk. Any amount of money you have in your offset account cancels out a percentage of your mortgage and reduces the amount of interest you have to pay.

How does it work? Say you have $200,000 left on your mortgage and $50,000 in an 100% offset account. The bank will subtract the $50k from your mortgage and only charge you interest on the remaining $150,000. While it doesn’t save you from eventually repaying the other $50k, it does save you interest, which can really add up over long periods of time!

But what if your lender doesn’t offer an offset with your home loan? No worries: browse offers that do. If you find an option that works better for your needs, it could be time to refinance.

Looking for the best offset account home loans? Check out the offset category for the 2022 Mozo Experts Choice Home Loan Awards

Youth saver accounts

Collage of a hand growing sunflowers.

Maybe owning a house isn’t really on the cards at the moment because you’re still in school, learning to drive, or just being young and cute. Well good news: youth savings accounts often offer you extremely attractive interest rates. Huzzah!

How does it work? If you’re under 18, most banks will offer you a version of a ‘youth saver’ account with little to no provider fees and high bonus interest rates, provided you meet some monthly conditions (like a minimum deposit). Some banks will even offer these kinds of accounts to under 30s.

However, not every account out there is competitive, and some come with sneaky hidden catches like reverting to a lower interest rate after a year or even having crummier rates than regular savers. Be sure to read the terms and conditions when comparing options out there!

High interest savings accounts

Collage of a young woman switching banks while sitting on a pile of money.

These guys are the cream of the crop, worthy of a chef’s kiss of the highest order. High interest saving accounts prioritise interest rates above everything else, often in the form of bonus interest you can accrue over long periods of time given you meet certain conditions, like a minimum monthly deposit or transaction amount. 

How does it work? Depends on the account. Whenever choosing a high interest savings account, make sure to pay attention to not just the interest, but the terms and conditions, any hidden fees, and other perks you might want like ethical or green investment options. 

Neobanks

Collage of a millennial woman swiping on her smartphone,

As their name suggests, neobanks can see the matrix. Okay, not really, but they’re still pretty future-minded! A neobank is simply a next generation banking platform with a digital twist.

How does it work? Neobanks are often online-only fintech websites or smartphone apps that offer competitive interest rates and exciting smart tool features, like AI budget tracking or open banking. A neobank isn’t exactly the same as a smart money app, nor is it the same as your bank’s mobile app, because the bank itself is branchless, new, and for the purposes of storing and managing your money. 

Not sure if it’s right for you? We’ve weighed the pros and cons of neobanks in a helpful guide.

Found a better deal? Here’s how to switch bank accounts

Did you know you’re more likely to break up with your partner than your bank? It’s easy to settle into a routine, because let’s face it: finding a good deal can take a bit of work. But it’s actually surprisingly simple to switch to a new bank and can even be done in 4 easy steps

  • Compare bank accounts.
  • Open a new bank account.
  • Change your regular payments.
  • Close your old account.

Voila! And best of all, many banks will happily put in the leg work for your business. So be sure to compare what’s on the market and see if you can get a better deal. After all, you’re worth it.

Head to our banking hub for more guides. Subscribe to our Moneyzone weekly newsletter for more cost crunching tips and tricks.

Compare high interest savings accounts - last updated 13 August 2022

Search promoted savings accounts below or do a full Mozo database search . Advertiser disclosure
  • Save Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    2.35% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Deposit at least $200 to either Spend or Save account from an external source each month.

    Earn up to 1.85% p.a in interest. No monthly fee to pay. Split your money in up to 10 Save accounts. Track your progress on each of your save accounts. Instant access to cash via PayID and Osko. Deposits guaranteed up to $250k per customer.

    Details
  • Mozo Expert Choice Badge
    Boost Saver with Go Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    2.30% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate of 2.30% is made up of the Base rate of 0.05% and Bonus rate of 2.25%. Deposit $2,000 each month and make 5 eligible payments from your Go Account. If you are between 18 and 25 deposit $1,000.

    Enjoy a high interest savings account bundled with an everyday spending account. No monthly fees. And new customers can get a welcome bonus of 5,000 bonus Virgin Money Points (ends 31/08/22. Offer criteria & T&Cs apply).

    Details
  • Mozo Expert Choice Badge
    Life - 18-29 years old
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    2.75% p.a. (for $0 to $30,000)
    0.65% p.a.(for $0 and over)
    Yes up to $250,000

    Make 5 card purchases/month with a Westpac Choice account and min 1 deposit and higher balance than at the beginning of the month in Life savings account.

    Are you 18 - 29 years of age? Earn up to a generous 2.75% p.a. variable interest on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30k.

    Details
  • Mozo Expert Choice Badge
    Bonus Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    2.10% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.

    Winner of a Mozo Experts Choice Award 2022 in the Regular Saver category. No monthly account fees. Available only on balances up to $250,000.

    Details
  • Grow Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.80% p.a. (for $0 and over)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Make at least 1 deposit per month and no more than 1 withdrawal, including internal transfers or external payments. Must enable the Lock Saver feature. 32 days notice for withdrawal and T&C's apply.

    Pay no monthly fees. Set-up to 9 personalised savings accounts and choose to lock as many accounts as you like to earn the maximum variable interest rate. With just 32 days notice to access your money again, your future self will thank you.

    Details

^See information about the Mozo Experts Choice Bank Account Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.