How much could I potentially save over 10 years at an average savings rate?
Many of us have savings accounts where our cash earns interest. Over the long term, the impact of time and compound interest can be substantial. However, as savings accounts have variable rates, it's difficult to get an accurate number (unless you have a crystal ball).
That said, it isn’t a useless exercise. Knowing how much potential your cash has when put to work can help keep you focused on your long-term financial goals.
How much does an average savings rate make?
Before we tackle the savings rate, it’s important to acknowledge how we came to these numbers. As you may know, Mozo tracks over 200 savings accounts. So, using our database, the team found some averages across all savings account categories such as bonus, base, and intro rate.
| Account Type | All Personal | Big 4 |
| All Ongoing | 3.57% | 3.44% |
| Only Bonus Rate Savers | 4.64% | 4.79% |
| Only Introductory Rates | 5.08% | 4.69% |
| Only Unconditional Rates | 1.37% | 1.62% |
As we’ve recently had one of the fastest rate hikes periods in history, these numbers may not be indicative of the long term. Therefore, we’ll have a look at the all ongoing average and calculate how that will compound over time.
Here are the results for a 10 year savings account balance at an interest rate of 3.57% p.a. and a $5,000 deposit.
Using Mozo’s savings calculator, we can see that our ending balance is $7,141. This is a significant amount, but it could be even higher if you added monthly deposits. Your balance would be this much better with the following monthly deposit amounts.
| Monthly Deposit Amount | Interest Earned | Final Balance |
| $100 | $4,537 | $21,537 |
| $250 | $8,131 | $43,131 |
| $500 | $14,121 | $79,121 |
While the amount of interest earned does go up, it's important to note that sustained deposits over a long period add up. For instance, you could use the final balance for a home loan deposit.
Savings account rate comparison
Another helpful metric is to compare two savings account products and map out these 10 years. For instance, we’ll use the Bank of Queensland Smart Saver Account at 5.00% p.a. versus the ANZ Plus Save at 4.90% p.a. with both starting balances of $5000.
| Account Name | Interest rate | Requirements/Restrictions | Balance after 10 years |
| Bank of Queensland Smart Saver Account | 5.00% (0.05% base rate) | $1000 a month and 5 eligible transactions with a linked BOQ account | $1002 (no extra deposits) $59,119 ($1000 deposits) |
| ANZ Plus Save | 4.90% | $250,000 account limit | $6,080 (no extra deposits) $58,988 ($1000 deposits) |
Since the BOQ account needs a deposit to get the full extra rate, we’ve added two outcomes. As you can see, low base rates are one of the risks that you’ll need to keep in consideration as any months you miss a deposit will result in less interest.
Overall—while interest rates are important to how much you earn—it seems that regular deposits also help a lot in building up your account balance. If you want to be sure how much interest you’ll be earning over a long period, then a term deposit may be worth considering.
So, if you’re ready to check out some high interest savings accounts, then head over to our hub pages. You can also check out and compare some savings accounts in the table below…
^See information about the Mozo Experts Choice Savings Account Awards
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