Where to stash your savings as interest rates continue to plummet

For many Aussie savers, finding a top notch place to stash their savings seems to be getting harder by the day. 

Recent Mozo data has shown that despite the Reserve Bank having held off from making another rate cut since October 2019, banks big and small have continued to slash savings accounts rates.

Since the start of February alone, ten banks have cut rates by up to 0.15%, with Westpac, Suncorp, Bank of Melbourne, BankSA and St. George among those in the naughty corner. 

According to Mozo Director, Kirsty Lamont, following the Reserve Bank’s decision to reduce the official cash rate to 0.75%, bank profit margins have taken a hit and lead many to make rate reductions in anticipation of a future rate cut. 

The result? A pitiful average ongoing savings rate of just 0.97%^. 

RELATED: Australia's best savings accounts for 2020

However, a new stream of banking options may provide Aussie savers with the interest boost they’ve been looking for. 

“With rates continuing to fall it’s more important than ever for savers to maximise their savings by shopping around,” said Lamont. 

“The ray of light for savers right now has been the entry of neobanks to the market with exceptional rates bringing much-needed competition.”  

While neobanks, Xinja, Up and 86 400 all share an ongoing rate of 2.25%, Up and 86 400’s rate is conditional, meaning savers will need to meet criteria before they can earn the interest. 

Aussies with 86 400 will need to deposit $1,000 into either their transaction or savings account every month, while Up only requires savers to make five card purchases each month. 

Xinja offers a ‘no strings attached’ 2.25% rate, which means that savers are set to earn the rate no matter what, while Volt offers an unconditional rate of 2.15%. 

While it’s not uncommon for Australians to be sceptical about investing their hard-earned savings into an new financial institution, Lamont explained that neobanks are regulated just like traditional banks and are protected under the Australian Government Guarantee Scheme, which safeguards deposits of up to $250,000. 

RELATED: Neobank 86 400 bags Mozo Experts Choice Award for best Regular Saver account

But for the Aussies who might need a little more certainty over the interest they'll receive on their investment over a longer period of time, Lamont says it might be worth considering a term deposit.

“You could consider a term deposit to help protect yourself from further rate cuts this year,” she said. 

“Right now you can still get 1.90% on a 12-month term deposit.”

So if you’d like to find out if you could be earning a better return on your savings, head on over to our savings account comparison tool, or get started by checking out current offers below. 

^At the time of writing 

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Last updated 24 July 2024 Important disclosures
  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first 4 months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2024 Mozo Experts Choice Award winner.

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  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

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

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

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  • Bonus Saver Account

    5.00% p.a. (for $0 to $250,000)

    0.05% p.a.(for $0 and over)

    Yes up to $250,000

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

    Start saving and earn interest with just a $20 deposit and make 5 eligible transactions each month. No fees or penalties for withdrawing money.

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  • Savings+Bonus

    5.00% p.a. (for $0 to $250,000)

    2.00% p.a.(for $0 to $250,000)

    Yes up to $250,000

    Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.

    Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.

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  • Mozo Expert Choice Badge
    Savings Maximiser

    5.50% p.a. (for $0 to $100,000)

    0.55% p.a.(for $0 and over)

    Yes up to $250,000

    For customers who have an Orange Everyday account, deposit $1000 into a personal ING account, make 5 eligible transactions and grow their nominated Savings Maximiser account each month.

    Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^

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^See information about the Mozo Experts Choice Savings Account Awards

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