Types of Savings Account

No matter what you’re saving for—whether it’s a holiday, a home deposit, or a new pair of shoes—there’s a savings account suited for every savings goal. 

Let’s take a closer look at some of the savings accounts available. 

Nearly all savings accounts are now online, and it's easy to understand why. An online savings account provides you with 24/7 access to your funds from almost anywhere in the world (just be cautious of international money transfer fees if you're travelling!). 

Due to reduced overhead costs for banks, these accounts typically offer higher interest rates and lower fees. They are usually linked to your transaction account and can be accessed through debit cards or digital wallets. 

Online saving account features:

• High-interest rates
• Convenient access to banking, anytime and anywhere
• No time wasted in queues or dealing with bank staff
• Quick and easy account setup, all done online

• No physical branches
• Difficult to access in poor internet conditions. 

High interest savings accounts, as the name suggests, provide higher interest rates than traditional savings accounts. They are designed to help you grow your savings more effectively, making them a great option for those saving for short- to medium-term financial goals.

Features of high interest savings accounts:

• Competitive interest rates
• May have conditions to meet to earn the highest rate
• Often have a base rate plus a bonus rate
• Often requires a linked transaction account.

While these accounts typically offer higher interest rates, they may have more restrictions on withdrawals or require you to meet certain conditions to qualify for the highest rate.

Introductory rate savings accounts provide higher interest rates for a limited time, typically between 3 to 6 months. These introductory rates can sometimes exceed regular bonus rates, but it's important to note that they are temporary. After the introductory period ends, the account usually shifts to a standard variable interest rate.

Intro rate savings accounts features include:

• High introductory interest rate
• Limited time period for the high rate
• May have conditions to meet during the introductory period
• Useful for short-term saving goals.

These accounts can be a good option if you have a short-term savings goal, but it's important to check what the ongoing rate will be after the introductory period ends.

Bonus saver accounts give you a higher interest rate when you meet certain conditions each month. These conditions often include making regular deposits, limiting withdrawals, or maintaining a minimum balance.

Bonus saver accounts features include:

• High interest rate when conditions are met
• Encourages regular saving habits
• May have restrictions on withdrawals
• Often requires a linked transaction account.

Bonus saver accounts could be a good choice if you're committed to growing your savings and can consistently meet the account conditions.

Introducing your children to the concept of saving at an early age can be beneficial. A kids' savings account is typically designed for children under 18 years old and operates similarly to a basic savings account, where the balance earns monthly interest.

Some youth saver accounts cater to older teens and can extend into adulthood, with some accounts allowing savings until the age of 35. 

Some characteristics of kids savings accounts are:

• Higher interest rates compared to adult savings accounts
• Often have no or low fees
• Age restrictions (e.g., under 18 years old)
• Some accounts offer fun features to engage children in saving.

For more, read the Mozo guide on savings for children to help raise savings-savvy kids!

Business savings accounts are designed for companies and organisations aiming to efficiently manage their excess cash. By utilising these accounts, businesses not only keep their funds safe but also benefit from earning interest. 

Key features of business savings accounts include:

• May offer tiered interest rates based on account balance
• Often have higher minimum balance requirements
• May be linked to business transaction accounts.

These accounts can help businesses earn interest on their working capital while maintaining easy access to funds.

While both savings accounts and term deposits are ways to save money and earn interest, they have some important differences:

The main differences include:

• Access to funds: Savings accounts usually (depending on rate conditions) offer easy access to your money, while term deposits lock your funds away for a set period.
• Interest rates: Term deposits interest rates are fixed, meaning you know exactly what you get for the agreed upon term. Savings account rates, on the other hand, can change as the provider sees fit.
• Minimum deposit: Term deposits usually require a higher minimum deposit than savings accounts.
• Flexibility: Savings accounts offer more flexibility in terms of deposits and withdrawals.

For a more in-depth look at the differences, check out our guide on savings accounts vs term deposits.

How to choose the right savings account

Choosing the right savings account depends on your financial situation and goals. Don't be swayed by high introductory or bonus rates alone—know how the account fits into your overall financial strategy.

Ready to compare? Check out providers on our savings account main page.