One of the most important things to consider before setting up a bank account is if it can help your money grow. And to answer that question, it’s essential to understand how much interest you can earn with a bank account, where can you get the highest rate of interest and whether you’ll need to pay any additional fees for high bank interest.
This guide answers all the questions you might have around bank interest so you can take a more informed decision about where to store your money.
Most Australian banks pay very little (0.01%) if any interest on everyday bank accounts. There are some financial providers that have higher interest rates of about of up to 2.25%. But to get a higher rate of interest, you may be required to maintain a minimum balance in your account or meet monthly deposit conditions. You can easily search for the highest bank interest on offer using Mozo’s free online tool.
The banks that offer a higher rate of interest on everyday transaction accounts don’t generally charge an additional fee for it. But like we mentioned above, since there are no free lunches, you will be required to have a certain minimum balance to be eligible for the bank interest.
Given that you can’t earn much interest by storing your money in an everyday bank account, you should make sure that you’re not paying any unnecessary charges such as monthly fees for maintaining the account or additional charges for withdrawing money from the ATM. You can easily find a number of bank accounts that come with a $0 account fee and a wide network of fee free ATMs using Mozo’s bank accounts comparison table.
Bank account interest is generally calculated daily and paid monthly on the first calendar day of the month.
Yes, you need to declare any interest that you receive from your bank account in your tax return.
To get a higher rate of interest you can open up a linked savings account. These accounts have interest rates of up to 3.50%. To get the most interest, keep the bulk of your money in the savings account and transfer to your bank account whenever you need to.
To shortlist the best savings account for your money, you should first ask yourself a few questions like whether you have a short or long term savings goal and if you can make minimum monthly deposits to the account. Depending on your priorities you could go for an intro rate saver, a bonus saver account or a long term savings account. For more information on this, you can read our detailed savings accounts guides.
Whether you’re looking for the best bank interest with an everyday transaction account or a linked savings account, you can find the best interest rates on Mozo’s banking hub.