With interest rates at an all time low, now might be the time to reevaluate our motivations when it comes to choosing a savings account. After all, these days savings accounts come with a lot more features than an interest rate. Think round ups, spending insights and so forth.
In fact, if anything now is the time to master those thrifty skills and start using these handy features to help you save more.
How do I start saving into 2021?
Now that interest rates aren’t a huge motivator, it’s time to roll up those sleeves and become a proactive saver. Here are our top tips to get your finances in order:
- Work on clearing your debts. To get yourself closer to a clean money slate, think about transferring any credit card debt you have to a balance transfer card. Just make sure you choose a card with a 0% balance transfer rate and that you can pay off your debt within the limited time period that that rate applies.
- Take stock. Review your incomings and outgoings to see what you’re spending money on at the moment. Once you have a full picture of how you use your money, you can start thinking about where to cut back or adopt better spending habits.
- Make a budget for yourself. This can be pretty loose - whatever works best for you or motivates you to spend less. You can create spreadsheets, make lists, use a savings app or if you don’t want to do any of that just keep outgoings below a certain amount.
- Find a savings account with lots of extra features. These days savings accounts come with a number of useful tools to help you proactively save, including round ups, spending insights and savings buckets.
What should I look for in a savings account?
While interest rates might not be the biggest motivator right now, there are still plenty of useful tools to take advantage of with a savings account. Some of these include:
- Round ups. This is where a bank rounds up your everyday transactions to the nearest dollar and deposits the difference into a nominated savings account. It may look like a lot of small change transfers, but it can really boost your emergency savings fund.
- Savings buckets. Or as plenty of banks call this, the ability to open multiple savings accounts, at no extra cost. This is helpful if you have a number of things to save for, or even if you want to manage your spending. For instance, if you have rent to pay and want to make sure you don’t spend it, you could transfer the exact amount over to one of your savings accounts.
- Direct debits. If you have a regular income and want to eliminate the temptation to spend it, set up a direct debit to put a percentage straight into your savings account. You can arrange it so that the money is transferred automatically on the day it is deposited or the day after.
- Spending insights. From funky pie charts to spending snapshots, a lot of banks these days offer useful insights into your personal spending habits. These insights are useful to help you review what your regular expenses are and whether or not you could rethink some.
- A decent interest rate. Although interest rates may not be the biggest motivator when choosing a savings account these days, they are still worth looking at. For instance, it is still possible to get a savings rate above 1.00% p.a. and make yourself a tidy little sum each month, to up your savings. Compare savings interest rates here.
Not sure where to start? Here are five savings accounts with some pretty nifty features:
- Up’s Saver Account
- 86 400’s Save Account
- MyState Bank’s Bonus Saver Account
- UBank’s USave with USpend Transaction Account
- Bank Australia’s Bonus Saver Account
Head to Mozo’s savings guides hub for more tips on how to start stashing cash for a rainy day.
*Averages and figures taken from information available in the Mozo database, correct as of 13 November 2020.
Compare savings accounts - last updated December 05, 2020
- MyState BankMyState Bank
Bonus Saver Account
- Heritage BankHeritage Bank
- Bank of QueenslandBank of Queensland
Fast Track Saver Account
^See information about the Mozo Experts Choice Savings Accounts Awards
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