Can I ask for a better rate on my savings?

With rates climbing upwards and the rising cost of living causing stress, we’re all looking to save money wherever we can. The first things we look at are always the big expenses - home loan repayments, credit cards - but could you be earning more on your savings?

We normally think about our savings as the money we’ve earned elsewhere, tucked away for later use. If you do tend to lock away a considerable amount of money in savings, without dipping your finger into the cookie jar too often, you could be missing out on some serious earning potential. 

Generally speaking, money in a savings account will earn interest when you continue to make deposits but limit your withdrawals. With a high interest savings account, you could earn up to 3.70% p.a. on top of your savings. 

That means that just by having your money in the right account for you, you’ll earn money just for letting your cash sit there. But chances are, as the RBA has raised the cash rate, your bank could be offering better interest rates - and you might not be getting them.

Holding an account with a bank does not automatically mean you will be eligible for a better rate. 

Make sure you are in an account that can accumulate a high level of interest, and that you meet the requirements for earning that interest. This means:

• Depositing a certain amount of money

• Leaving your balance for a certain period of time without making withdrawals or transfers out of your account
  

• Making a certain amount of transactions

Different accounts have different requirements. For instance, at the time of writing, looking at some of the winners from Mozo’s 2022 Expert Choice Awards for Savings Accounts:

• MyState Bank’s Bonus Saver Account requires you to deposit at least $20 a month and make at least 5 debit transactions for the maximum interest rate (you also need a linked transaction account).

• uBank’s Save Account requires you to deposit at least $200 per month for the maximum interest rate.

• ING’s Savings Maximiser not only requires you have a linked Orange Everyday account, but also to deposit $1,000 per month into an eligible ING account, to make a minimum of 5 card purchases per month, and to grow the balance of your account month on month - all for the maximum interest rate.

Take a look at the individual requirements of your savings account, and don’t be afraid to switch things up if you find a better opportunity.

The short answer? Yes!

You wouldn’t be uncomfortable asking for a better price on that second-hand car you’ve been eyeing up, and you should feel just as confident asking your bank about a better rate. There are tips and tricks to making sure you do it right, but there’s no reason to be stuck on an old-fashioned rate when new savings accounts might have opened offering higher interest.

Call up or email your bank and enquire about their better rates, and do your research about what else is available on the market. 

There might be a trade-in - you may end up needing to shift across to a different kind of account, or even to shift providers. Use our savings calculator to see how much you can save with different interest rates and planned deposits.

Be firm and polite with your request, and make sure to pick the right time - we might not advise asking for a better rate during a dip in interest rates! If the market has seen rates lift, you’re in a much better position to haggle. Within reason, that is.

There’s no one answer to which bank offers the best savings interest rate, because it all comes down to what you need personally and which requirements suit you best.

While you might like the look of the highest rate available, remember that you will have commitments to meet in order to receive the maximum rate, and these can also be conditional. 

If you do want to see some standouts, we’ve rounded up some Mozo award winners and editors choices. You can also use our savings search to compare the savings accounts in our database.

There are some little tricks and traps that are easy to get stuck in with improving your savings interest rate. Make sure to be aware of introductory rates.

• Introductory rates: It’s easy to get lured in by a super high rate, but remember that an introductory rate will end. You’ll want to make sure the ongoing rate is worth your while!

• Conditional rates: While most rates are attached to conditions, you’ll want to make sure these are conditions you can actually meet. Remember requirements for linked accounts and caps to balances you can earn maximum interest on, alongside requirements for minimum deposits and transactions.

If you want to earn a higher rate of interest on a set amount of money, without quite as many conditions to worry about (or the pressure of calling your bank), there are other options. One you might consider is a term deposit.

A term deposit works in a similar way, earning interest on your savings, but instead of being accessible, the money is locked away for a set term. There are lots of pros and cons in choosing between the two, but term deposits do tend to accrue interest at a higher rate with less conditions.

Since you can’t access the money in a term deposit, there are fewer conditions attached. We have money for terms between 1 month and 5 years in our database, and you can use our term deposit calculator to work out how much you could earn.

If you do need access to your savings in the immediate future, these might not be the choice for you - a key difference between the two options.

Whatever you choose, earning a little extra money on your savings is an important way you can stay on top of things during uncertain times.

Stay educated on what’s happening with the rates on savings accounts to give yourself the tools you need to bargain for a better interest rate. Find our standouts with Mozo’s best savings accounts.