Savings are finally worth the return: Interest rates surpass 4%

• ING’s saving maximiser interest rate will be 4.05% from the 12th of October, taking the top spot in the Mozo database for bonus savings accounts 
• The average bonus savings account interest rate in the Mozo database is 2.35%
• 8 deposit-taking institutions have announced they will be passing on the October RBA cash rate rise of 25bp in full or more 
• Savers could cash in on $175 in additional interest a year, if they deposit $10,000 in the leading bonus savings account, instead of an account with the average rate. 

Analysis from financial comparison site Mozo.com.au has found that the leading at-call saving account interest rate has surpassed 4% for the first time in 7 years, with ING’s bonus rate increasing to 4.05% from 12 October. 

ING has announced that it will be increasing the interest rate on its Savings Maximiser account by 45 basis points,  taking it up to 4.05%, which will be the leading rate in the Mozo database. This is 170 basis points above the current average bonus savings rate, which is 2.35%. 

“The Reserve Bank of Australia hiked the cash rate for the sixth consecutive month on Tuesday, and savers are finally seeing some substantial increases, with a few banks passing on more than the 25 basis points,” says Claire Frawley, Personal Finance Expert at Mozo.  

Macquarie and My State Bank have also announced that they will be passing on more than the 25 basis points. Macquarie's introductory saving rate was increased by 0.30%, up to 4% and My State Bank is increasing its Bonus Saver Account by 0.40%, to 3.60% on 12 October. 

“Our database shows that more than 10 deposit-taking institutions are offering above 3%, so now is the time to be comparing the rates on offer and switching to a more competitive deal,” Frawley says. 

Banking the soon-to-be leading at-call savings rate of 4.05%, from ING, instead of the average 2.35% on a $10,000 balance over 12 months could earn $175 more in interest, a total of $413 of interest over the year.

Notes: Rates are correct as of 7 October 2022. Additional interest earnt by going with the leading rate assumes that all monthly conditions are met.