How to improve the interest on your savings today

Saving up for something special? 

Whether you're looking forward to a trip or want to get a birthday present for a friend, saving can feel a bit up hill sometimes. That's why at Mozo we think it's worth trading in your old savings account for a better deal. A simple switch could help you increase the amount of interest you earn each year!

The official Aussie interest rate has held steady at 4.35% for a few months, so for now there are some good savings rates and it's worth capitalising on these.

This is where a little clever comparison comes into play. According to Mozo’s database, the average unconditional rate in June 2024 is 1.40% p.a. while the average bonus rate is 4.61% p.a.^ So, switching from the average unconditional to bonus is a difference of 3.21% p.a. 

Keep in mind however, that if conditions are not met on a bonus rate savings product, base rates which are much lower than bonus rates will apply. And conditions can vary between these savers, so always be sure to check them. They can include, having a linked transaction account with the same bank, making minimum monthly deposits or not making any withdrawals.

Checking out the bonus rate leaders

Let's look at some brief examples.

The highest bonus rate is 5.55% p.a., currently offered by ME Bank, as per Mozo data. There are also a few other bonus offerings at around the 5.50% p.a. mark, including Bank of Queensland, ING and Move Bank (of course each has conditions to be met).

So there are plenty of options to indeed increase your earning rate, if you've settled for a saver at the lower end.

But how long will savings account interest rates stay where they are? Mozo banking expert, Peter Marshall says that savings rates are likely to stay steady unless the banks decide they haven’t had enough deposits. “If they do come down, I don’t think it will be by much—not until the RBA is getting closer to cutting the cash rate. But keep in mind there's a chance of either an increase or cut this year, so we need to keep an eye on it”. 

How to scoop a good interest rate

If you’re afraid that the search for a better-value savings account might cause too much hassle, don’t worry - the process is very simple.

Here are two ways to get started: 

1. Negotiate with your existing bank

Many of us walk into our favourite shops and ask for their best price - with no hesitation! So why not do the same with your bank? Calling up and negotiating a higher rate for your savings account should land you a better deal that earns you more interest.

But don't just start dialling! First, know your stuff - research and compare so you’re well-informed about the current market. Check your options and see how your bank stacks up against them by using our savings account comparison table. 

2. Switch to another savings account 

No dice from the bank? Walk away. Move your cash stash to a savings account with a higher interest rate somewhere else. Online applications and transfers have now made this process easier and more convenient than ever before. 

Now you might also be wondering, how do you know that you’re getting the best rate possible? Comparison tables can be your best friend and that's where we can help you. Mozo lists the leading savings accounts in the market, so by comparing just a few you’ll also get a good idea about fees and conditions, not just interest rates.

Okay, so what's next? 

Well, you've found an account that suits you, it's time to: 

• Open the new savings account.
• Transfer direct debits coming out of your old account and redirect money going in.
• Transfer your remaining funds. 
• Close your old account.

Easy. Check out our high interest savings accounts comparison table to find the account that could be earning you a higher rate.

^ The average rates mentioned in this article are based on a savings balance of $10,000.