Savings accounts for bigger balances

No matter the size of your savings bundle, you want to stash it in a savings account or term deposit where it can earn interest and grow. 

Right now, average rates for both types of deposit accounts are looking pretty grim. Mozo’s data shows the average ongoing savings interest rate is 0.82% p.a., with term deposits only just edging ahead at 0.95% p.a. for a one-year term.

However, there are outliers with much more appealing numbers, especially in the savings account camp. So, you might want to start searching for a stellar rate. 

For example, young savers (18-29 year olds) can nab a market-leading 3.00% interest rate with the new Westpac Life account, while savers at any age will earn 1.65% p.a. on top of their savings with the ING Savings Maximiser (if criteria is met in both cases).

But there is a catch: bonus interest that can be earned on these accounts caps out at $30,000 and $100,000 respectively. 

If you’ve got a large savings balance – perhaps you’ve recently earned money on the sale of a property or have received a redundancy payment – you’ll need to find a savings account that provides top features across your full balance. 

Check out a few potential contenders below which could cater to your higher balance needs. They’re all Mozo Expert Choice Award winners for 2020, so you know they’ve got our seal of approval.*

What’s my savings account interest rate and are there any conditions?

As outlined, aiming for a fab interest rate is a great move for any type of saver. But for those holding onto larger amounts, there are limits to consider. 

Many accounts won’t allow you to earn bonus interest over $100,000, dropping back to a much lower base rate for any dollar more you save in the account. On the flipside, others allow you to accrue interest on a higher balance, but only for a short introductory period (maybe four or six months). 

The short of it is: don’t get sucked in by a flashy headline rate, and make sure you read the fine print. Here you’ll also find any criteria you need to meet to gain the highest return on your balance. This often includes things like:

• Holding a transaction account with the provider that’s linked to the savings account
• Making a specified number of purchases via the linked account monthly
• Depositing a certain amount into the account (or a linked transaction account) monthly 
• Not making any withdrawals in the month.
  

Can I access my funds?

One of the main benefits of choosing a savings account over a term deposit to save a large nest egg is that you have easy access to your money. You’ll often be required to give notice if you want to take your funds out of a term deposit before the end of the agreed-upon term. You may even be slapped with an early withdrawal fee or have your interest rate reduced as a penalty for doing so.

Some savings accounts like the Australian Unity Active Saver and the MOVE Bank Bonus Saver will cut your bonus interest for the month if you make a withdrawal. Since both accounts have solid ongoing rates (1.75% and 1.60%) you’ll be bummed if they’re cut for the month (down to 0.25% and 0.40% respectively).

Are there any fees or penalties?

For having a high balance? No. But, as mentioned, you could be penalised in the form of losing your monthly bonus interest by not adhering to account criteria. And as with any financial product, try to find an option without things like account keeping fees or transaction fees which could cut into the dough you’re making off interest. 

Keen to start the savings account search? Get started with our high interest savings accounts comparison page.

*The Mozo Experts Choice Awards highlight products in the marketplace we believe offer great value to Australians. The 2020 Savings Account Awards assessed 236 personal savings products from 77 Australian financial institutions.