August savings accounts: Westpac surprise new market-leader

As headline rates dropped in July, Westpac made a surprise move. The big four bank introduced a new savings account: Westpac Life, which comes with an enticing 3.00% p.a. interest rate.

Westpac Life, what’s the catch?

Well, the thing is it’s only available for 18 to 29-year-olds and you can only get that higher interest rate on balances up to $30,000. The good news is if you do fit into that younger age group, then you might be able to snag yourself some sweet interest on your savings. Just be sure to make at least five transactions each month, through your linked Westpac Choice account.

Headline rates fall

Of course, if you don’t fit into that younger millennials/Gen Z club, then you will have to look elsewhere for a more competitive rate.

If you put your money with one of the previously market-leading neobanks, then you will have been disappointed in July. We saw the likes of 86 400, Up and Xinja cut rates by as much as 25 basis points.

86 400 cut the interest rate on its Save Account down to 1.70% p.a., while Up’s Saver Account went down to 1.60% p.a. and Xinja’s Stash Account dropped to 1.65 % p.a. 

86 400 still top five

Now this might all sound fairly unpromising, but even with this new lower rate, 86 400’s Save Account still holds one of the top five savings rates in the Mozo database*. 

Right now, the average savings rate is around 0.82% p.a., so even if your rate drops to 1.60% p.a., you’re still well ahead of the curve*. 

Rate research: shop around

Even though savings rates are on a downward spiral at the moment, it is still worth shopping around to give your stash that little bit of extra help.

“It’s always better to take one of the best rates that you can,” said Mozo’s Banking Expert Peter Marshall. “Even if it’s only 20 or 30 basis points difference, depending on how much money you have, it can make a difference.”

Marshall added that it is definitely worth looking beyond the big four banks, or even just changing things up.

“If you want to have a bit of money with the big four, split it 50/50 between a big bank and another provider,” said Marshall.

At 1.75% p.a., MyState Bank and Australian Unity currently offer the most competitive ongoing savings rate available in the Mozo database*. The conditions are as follows:

• Australian Unity Active Saver - Earn up to 1.75% p.a. on balances up to $500,000. Deposit at least $250 each month into your savings account to ensure you receive the full interest rate.
• MyState Bank Bonus Saver Account - Again you can earn a maximum of 1.75% p.a. interest with this savings account. This interest rate can be earned on balances up to $250,000. Just make sure you deposit at least $20 each month and make at least five transactions with your linked Everyday or Glide Transaction account.

Curious to see if you can bag yourself a more competitive savings rate? Head to Mozo’s compare savings accounts page or check out the interest rates on offer below for more options.

*Interest rates taken from information available in the Mozo database, correct as of 30 July 2020.