Compare Savings Accounts in Australia

April market update: Savings accounts

Written by: Tom Watson, Finance journalist, 1 April 2021

With the official cash rate sitting steady at an historic low 0.10% and unlikely to move higher anytime soon, the environment for Australians looking for a decent return on their savings remains tough. The general rate trend so far in 2021 has followed a downward trajectory, with plenty of banks cutting interest rates on their respective savings accounts. 

However, the significant gap between the higher and lower savings account rates on the market might still provide strong motivation for savers not content to accept a lower return on their savings balance. 

Which banks stand out?

The major takeaway if you’re shopping around for an interest rate at the higher end of the market is that you’ll need to look beyond the major banks and more towards online and challenger banks. The exception here is the Westpac Life Account which is offering an ongoing bonus rate of 3.00% to 18-29 year olds. 

For savers happy to meet monthly requirements (e.g. regular deposits), a savings account with an ongoing bonus rate could be one of the more rewarding places to park your savings. The likes of 86 400, AMP, ING, ME, MyState Bank and UBank have some of the most competitive rates on offer at present in this category - all of which are above the 1.00% mark. 

Meanwhile, savers with a short term goal in mind may want to look at an account with an introductory rate. Rabobank (1.50%) and IMB Bank (1.20%) currently have the highest intro rates in our database, though bear in mind these rates only apply for four months. 

Savings account rates of note in April:

Here are the current rate leaders in the Mozo database for three different types of savings accounts: those with an ongoing bonus rate, an introductory rate and a base rate. 

• Ongoing Bonus: 1.35% with the ING Savings Maximiser. In order to get the maximum rate savers will need to meet a number of monthly requirements though, including a minimum deposit of $1,000, at least 5 debit card transactions and they’ll need to grow the account balance in the month.

• Introductory: 1.50% with the Rabobank High Interest Savings Account. The 1.50% rate is only valid for the first four months though, after which it will fall to an ongoing rate of 0.25%.

• Base: 1.00% with the Volt Savings Account. This rate is unconditional, meaning there are no monthly requirements in order to earn it.

Choosing the right savings account

Saving money is hard enough so you want to make sure you're earning a decent interest rate and avoiding unnecessary fees. This is where we come in. Mozo can help you make the most out of your hard-earned money by finding the right savings account match for your needs.

But finding an account that's right for you depends on different factors such as whether you have a short or long term savings goal, whether you can make minimum monthly deposits to the account, and whether you would consider bundling your savings account and bank account together to access a higher interest rate.

We can help you weigh up all these factors as well as analyse the latest savings interest rates and fees across all the main financial institutions in Mozo's database. So whether you're looking for online saver accounts, kids accounts or a high interest savings account to maximise your savings, our nifty comparison tools let you compare accounts conveniently according to price as well as features.

You can also read savings account reviews from real customers around Australia to get the inside story on everything from convenience to customer service.

This page is all about personal saving. If you are after information on business saving, head over to our business banking section.

Popular savings account options

To help you understand the different types of accounts available, and their key differences, here is a list of popular savings accounts:

Online saver accounts: In a world that's moving from gadget to gadget, online saver accounts are ideal for technology-savvy savers. Online banking cuts out the hassle of visiting a branch and lets you access your account on the go. Lower bank overheads also mean higher interest rates for you and lower fees (in fact most online savings accounts have no account fees).

Most banks also have customised banking apps that let you access your account on your smartphone. In fact, some financial providers also allow you to use their banking app on your smartwatch so you can check your balance with a flick of the wrist.

Bonus saver accounts: These accounts offer a bonus interest rate if you fulfil certain criteria such as meeting monthly deposit or withdrawal requirements. Some of the hottest savings rates around are only available if you bundle your bank account and savings account together with the same provider.

While these conditions can seem limiting, they can also reinforce your savings habit. Knowing that you'll lose that top interest rate if you access your money is a great incentive to keep your savings on track.

Intro rate saver: As an incentive for switching accounts banks often offer bonus introductory rates for a period of 3 to 6 months from opening an account with them. Intro rates are usually quite high, but once the introductory period ends the interest goes back to the standard variable rate for the account. These accounts are ideal for people who are looking at a short term saving goal or are happy to switch banks every couple of months to get the highest rates in the market.

Long term savings account: If you are planning to save money over a sustained period of time, and don't want to switch accounts frequently, you should go for an account that offers the highest standard rate of interest.

Kids savings accounts: Introduce your children to the idea of banking and saving money with a kids savings account. These accounts usually don't have account fees and offer a competitive interest rate but often have conditions like limited or no withdrawals to get the highest rate.

Features to look for in a savings account

While it may seem obvious that an account offering the highest interest rate would be the more ideal option, it might not always be that simple. Here are other important features that you should keep in mind while comparing the different savings accounts available:

• No account fee: When your aim is to save, you don't want to spend unnecessary money on banking fees. Look for a savings account with no account fees. Most online accounts are fee-free but some accounts that offer branch access may still charge a fee for over the counter transactions.

• Frequency of withdrawals: The whole point of a savings account is to save money so if you want to earn the highest rate of interest often there are limitations to the number of withdrawals you can make each month. If you think you will need to access money from your account on a regular basis, pick an account with a high standard interest rate to allow for frequent withdrawals. Also, it's a good idea to make sure you have access to Internet banking so you can deposit money online to make things faster and simpler.

• Monthly deposit requirements: Many savings accounts require you to maintain a minimum monthly balance or deposit a certain amount every month to get the highest rate of interest available. If you are unable to do so the bank will lower your interest rate, or pay no interest for that month. So, it's a good idea to work out how much you can save each month and then look for a bank that offers bonus rates for fulfilling these criteria, then set up an automatic deposit into the account.

• Introductory savings interest rates: Intro rates are ideal if you are saving for the short term because they offer a high interest rate for about 3 to 6 months. But if you have a long term saving goal and you don't want to switch accounts regularly, you should check what the rate would be once this period expires.

• Linked accounts: With most online savings accounts you'll need to have a linked transaction account so that you can transfer money to and from the savings account. Sometimes this account needs to be with the same bank (and sometimes you can link to any bank account). If the account requires a same bank transaction account be sure to check for fees and features of this account as well as the savings account to ensure you will not end up paying extra fees.

JP Pelosi

Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.