Choosing a savings account to suit your savings goals

Why saving for different goals is so important
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After making a savings bet with myself, I hit my goal of $500 and have since been looking for a place to move my money so that I can get a better return on it. What’s the saying, make your money work for you!

I’m after an account I can store my money in which gives me:

  • A decent return on savings through a good interest rate.
  • An account with minimal or no fees.

        After some (quite a bit) of research, I noted that there are three sensible account types that could be great options for me: savings accounts, bonus savings accounts and term deposits. All three provide useful ways to “bank” your money but there are a few pros and cons to each.

        For example, a number of the standard savings accounts don’t give you good interest rates, though for some younger savers they do. Meanwhile, a good term deposit can typically offer higher interest rates, but you'll need to lock the money away for a set period of time.

        There are also other rules to follow across the board, in order to get the best out of any one account.

        For some added context, keep in mind that the average interest rate across all savings accounts in the Mozo database is just 0.46% (as of 31 May). This isn’t fantastic but then again for ongoing bonus offers, there are better rates at around 2.00% which come with specific monthly requirements.

        With so much to think about, to assist with my search and yours, I’ve pinpointed a few potential options that I’m certainly considering and why they stood out to me.

        Firstly, a few savings accounts.

        Savings accounts for younger people

        Some options that stood out to me in Savings are Westpac Life 18-29, Police Bank Online SuperSaver 18-29 and the Bank of Queensland Future Saver Account.

        Firstly, Westpac Life 18-29 appealed to me because it is only for people between those ages. Their current interest rate is 2% (maximum rate), which is decent relative to a lot of the other accounts out there. There are some other things to consider like the fact that you need to make five card purchases per month and your balance must increase each month to get that 2%. I am not entirely sure I can meet these requirements and so I potentially face a 0.15% rate instead (at a minimum), which is what this product offers short of meeting the rules.

        Another condition worth pointing out is that you can only put a maximum of $30,000 in this account. That’s the limit.

        The second savings account that stood out to me was Bank of Queensland’s Future Saver Account 14-35, which has a 3% interest rate (maximum rate), on balances up to $50,000. That’s pretty good.

        To get this rate, you’ll need to be between 14-35 years old, deposit $1,000 or more to your linked Everyday Account and make 5 eligible transactions with the linked debit card each month. Otherwise your interest rate would drop to 0.05% p.a. A downside I saw was that there’s no ATM access with this account, so you’d need to make withdrawals from your linked Everyday Account.

        Other saver accounts that come with a bonus or boost

        Let’s hop into some other savings accounts, this time with an eye on the bonus interest element. If you’re having trouble saving like I was, they are potentially a good way to get a head-start on your savings. I discovered that it’s important to double check the standard ongoing rate just in case it changes down the line, should you not meet the set out criteria.

        Some accounts that stood out to me in my research most were MyState’s Bank Bonus Saver and Virgin Money’s Boost Saver.

        MyState Bank's Bonus Saver Account is offering 1.10% interest (maximum rate). I know what you’re thinking, that’s a very low rate, however I like that you’ll only need to deposit a minimum of $20 a month and make just five debit transactions to qualify for the maximum rate on offer. You’ll also need a Bonus Saver Account and Glide Transaction account.

        Virgin Money’s combined Boost Saver and Go Account is a combined transaction and savings account and gives you a decent bonus rate up to 1.60% p.a (maximum rate when all criteria are met). The bonus interest of 1.60% only applies when you deposit $2,000 into your Go Account and make 5 debit card purchases, direct debit or BPAY payments in the previous month and enable the Lock Saver feature. Also, monthly conditions to earn the bonus rate vary depending on your age, so you need to check these extra conditions. Lastly, should you meet all the rules, you will also be able to earn Virgin Money Points.

        Term deposits are worth a look

        Okay, that brings us to term deposits. If you haven't heard of these, now’s a great time to learn - and no, they're not just for your grandparents. Term deposits are a sound savings option if you have a lump sum that you want to lock away and not be tempted to access. I like the idea of term deposits for storing money for my yearly trip to Greece.

        To reward yourself for being a disciplined saver, TD’s usually give you a much higher interest rate than if your money was sitting in a regular bank savings account. For example, I’ve weighed up  Judo’s Personal Term Deposit, where you’ll be able to score a rate of 3.85% p.a. for a 5-year term (as of June 1, 2022), and between 1.15% p.a. and 3.75% p.a. for shorter terms. The exact interest rate depends on the term selected and that you hold the money in the TD for the duration of that period until maturity.

        You can roll the money over into a new term deposit at maturity but that will depend on the terms and conditions of the product.

        If you’re in the business of seriously saving money, say you need $40,000 for your wedding but are not great at saving, term deposits might be a great choice for you. However, if your main concern is being able to withdraw cash, then TDs might not be right because you have to lock away your money for a set period of time to avoid a penalty.

        If you fall into the latter category, a high interest rate Savings Account might be better, but of course these too have requirements you must meet.

        At the end of the day, choosing the right savings account for you should depend on what’s most important to you, your lifestyle and your savings goals.

        To save you some time, you might want to check out the winners of the Mozo Experts Choice Awards 2022 for the best saving

      • Choosing the best savings account for your needs - last updated 13 August 2022

        Search promoted savings accounts below or do a full Mozo database search . Advertiser disclosure
        • 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
        • 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
          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 Savings Account Awards

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