What is a 'good' savings account rate right now?

By Olivia Gee ·
Person looking at computer for savings accounts

We talk a lot about getting a ‘top rate’ or ‘good deal’ here at Mozo. But with uncertainty – financial and otherwise – plaguing most of 2020, the line between ‘good’ and ‘less-than-good’ in personal finance is becoming a little blurry.

This is particularly evident in savings account interest rates

At the end of May, we were disheartened to see leading accounts in Mozo’s database dropping ongoing savings rates below 2.00%. At the time, the average ongoing rate sat at 0.74%.

Succeeding months had similar results, with the average rate tracked by Mozo slowly zig-zagging downwards.

Now, as we sneak across the halfway point of October, it’s clear that the more things change, the more they stay the same. The average ongoing rate in our database is 0.58%, with many of the higher rates sitting closer to the 1.50% mark.

So, to help keep everyone’s spirits up and continue striving to find that lauded ‘good deal’, we’ve mapped out the lay of the savings account land.

Introductory periods, bonus rates and conditions

These are some of the key concepts you’ll need to consider when choosing a savings account. 

An introductory rate is what it sounds like: an interest rate you get for an initial period of time (often three or four months) when you open an account. It’s usually much higher than the base rate it’ll revert to after that period. This feature could be great if you’ve got a short-term savings goal to reach, or if you’re the type of saver who enjoys bank hopping for the best deal.

Bonus rates
are generally higher ongoing interest rates you can access if you meet certain criteria. This is a great option if you have consistent income and expect to save a similar amount each pay cycle.

The conditions for these kinds of accounts often involve making regular monthly deposits or completing a certain number of transactions through a linked account or card. You’ll find other accounts where the rate drops if you dip into your savings pool. 

Below are the top rates in each of these categories in Mozo’s database right now, along with the relevant conditions and timeframes.


*Top introductory savings rates: 


*Top ongoing bonus savings rates: 

  • 1.60% Up Saver Account (when you make at least five successful card purchases per month) Remember: this rate will drop to 1.10% from 1 November.
  • 1.55% Me Online Savings Account (when you make at least four tap & go payments per month).


Big banks are behind

If you want your money to make more money, you’ll want to keep backing the little guy. While the Big 4 (ANZ, CommBank, NAB and Westpac) may be familiar, they’re not necessarily your best friend in the savings department. 

According to Mozo’s data team, the average rate of the group is currently 0.51%, but it dops to a miserable 0.28% if you don’t include Westpac’s rate-leading Life account.

This magical account is really the only positive outlier within the major players and is dedicated to savers aged 18-29. If you fit within this age bracket, you can take advantage of your youth with 3.00% interest on up to $30,000. 

But, as always, you’ll have to play by the rules to score the bonus rate. This includes making at least one deposit (of any size) into the account each month so that it grows, and making a minimum five transactions per month with a linked Westpac Choice debit card. 

If you’ve saved more than $30k, you can still get 0.85% on any dollars over the limit when you meet the conditions.

What else to consider when choosing a savings account in 2020

Unlike some other financial products, you don’t normally have to consider things like fees with savings accounts. But you do have to figure out how a savings account fits in with the rest of your finances and the economy.

For example, if you’re paying off a home loan, you might be better off keeping the bulk of your savings in an offset account. This feature essentially reduces the amount of interest you pay on your loan. You’ll want to investigate whether this saves more money than the interest you might make from a savings account. 

When you do look at things like bonus interest criteria and short-term introductory periods, it’s also important to consider that Australia is heading into a recession

If you’re facing uncertain employment opportunities or other financial hurdles, you’ll want to find a savings account with achievable interest earning conditions and a financial institution with supportive hardship policies. 

If you’re worried about your savings in 2020, follow our tips for creating a solid financial plan. And if you are in the market for a fresh savings account, the high interest options below could help you earn as much as possible on top of your funds right now.

Compare high interest savings accounts - page last updated October 17, 2020

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure.

  • mozo-experts-choice-2020

    1.50% p.a. (for $0 to $250,000)

    0.15% p.a.(for $0 and over)

    Yesup to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.

      Compare
    Details
  • 1.15% p.a. (for $0 to $250,000)

    0.01% p.a.(for $0 to $5,000,000)

    Yesup to $250,000

    Minimum deposit of $200 and no withdrawals in the month.

      Compare
    Details
  • mozo-experts-choice-2020

    1.20% p.a. (for $1 to $250,000)

    0.20% p.a.(for $1 and over)

    Yesup to $250,000

    Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

      Compare
    Details
  • 1.60% p.a. (for $0 to $50,000)

    0.10% p.a.(for $0 and over)

    Yesup to $250,000

    Make 5 or more successful card purchases per calendar month using your Up debit card and digital wallets (ATM transactions excluded).

      Compare
    Details

*Accurate at the time of publication.

^See information about the Mozo Experts Choice Savings Accounts Awards

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Olivia Gee
Olivia Gee
Money writer

As one of Mozo’s money writers, Olivia Gee shares her research and insights across banking, insurance and property to help readers save. She loves getting stuck into a story, unveiling all the facts, breaking down stats and drawing on personal experiences - this is what drives her as a journalist. She has a double degree from the University of Wollongong, with a BA in Journalism as well as Media and Communications.