Is a savings account worth it in 2023?

For high interest rate chasers, savings accounts are pretty appealing right now. Following multiple cash rate hikes in 2022, rates have continued to increase. 

It didn’t take us long to come up with five reasons to consider a savings account. Here’s our summary of why savings accounts are still worth it in 2023.

A piggy bank, with extra room

When all is said and done, a savings account is basically a modern day piggy bank with a bit of extra room. It’s a safe place to stash funds out of reach, in preparation for a rainy day. 

In Australia, all authorised deposit-taking institutions (ADIs) are backed by the federal government’s Financial Claims Scheme. In other words, that’s all banks, mutual banks and credit unions. Under the scheme, deposits per customer per ADI are backed by the government up to $250,000. That means that if your bank were to fail, up to $250,000 of your money would be secure. So just like a piggy bank on your bedside table, a savings account is pretty safe. 

Money out of sight, out of mind

As most savings accounts don’t come with a linked debit card, accessing funds at a moment’s notice is harder. Impulse purchases are difficult to make when you don’t have access to an ATM or the option to make tap and go payments. To access savings, usually you will have to transfer them across to an everyday transaction account. 

It’s not ideal to move money out of your savings, and banks will even discourage it. Often you will be hit with either a transfer fee or the interest rate on the savings account will be reduced dramatically. For all these reasons, a savings account really becomes a place to keep money out of sight and out of mind.

Low risk, low maintenance

Compared to share trading and buying on credit, an emergency savings fund is a fairly low risk way to be prepared for tough times. As mentioned above, ADI-licenced banks are backed by the Financial Claims Guarantee scheme too. So if you’re not big on investing or you’re worried about racking up debt with a credit card, a savings account could be a less stress-inducing option.

As well as being low risk, savings accounts are also often low maintenance. The only thing you usually have to remember is to deposit money regularly into your stash. A number of banks even have the option to set up automatic bank transfers, meaning you might not even have to worry about remembering that! 

Savings tools to write home about

In 2023 there are many savings account that come with nifty tools to help you stash cash. Features that come with some accounts these days include roundup tools, spending insights and reminders to pay money in.

These extra features can encourage you to save more and regularly. Things like spending trackers and insights are also useful to help paint a bigger picture of what you spend your money on, on a daily basis. You could even use the insights to help you cut back.

A bit of interest on the side

Finally, while rates are low at the moment, it is still possible to earn a bit of interest on your savings. For example, at the moment the average ongoing interest rate for savings accounts tracked in the Mozo database is 2.48% p.a.* 

Looking for a new savings account? Then head to Mozo’s compare savings accounts page to review what accounts are on offer right now.

*Average based on savings accounts tracked in the Mozo database, correct as of 12 January 2023.