What is a savings account?

By Mozo ·

So you’ve got a nice little nest egg built up and now you need somewhere to stash it. Well, a piggy bank is severely outdated and when you leave your savings in your everyday transaction account, well… you spend them.

That’s when a savings account comes to the rescue.

Ready to find the best one for you? Compare now. 

Savings Accounts Comparison Table - last updated January 23, 2021

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure.
  • mozo-experts-choice-2020
    Bonus Saver Account

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.20% p.a. (for $0 to $250,000)
    0.10% 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 Everyday or Glide transaction accounts.

    Winner of a Mozo Experts Choice Award 2020 in the Regular Saver category.^ No monthly account fees and no minimum balance requirements.

  • Serious Saver

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.90% p.a. (for $0 to $1,000,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    No withdrawals in the month. Bonus rate for first 4 months, reverting to 0.05% rate after*

    $0 monthly account fee. Link to any Australian bank account.

  • Saver Account

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $1,000,000)
    0% p.a.(for $0 and over)
    Yes up to $250,000

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

    No monthly fees and earn up to 1.10% interest when you make 5 card purchases per calendar month. Automatically receive a $5 bonus into your new Up account when you use the special code MOZO5SAVE at sign up.

  • Online Saver

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $500,000)
    0.35% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    No account keeping fees. No minimum balance required. Unlimited phone and internet transactions.

  • Flexi Saver

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.85% p.a. (for $0 to $5,000,000)
    0.05% p.a.(for $0 to $5,000,000)
    Yes up to $250,000

    Increase balance by at least $300 in the month

    No upfront or ongoing fees. Unlimited free transactions. Great for regular contributions.


What a savings account is not

So you’re at the ATM, and you’re given the option of cheque, savings or credit. You press savings, and it comes out of your savings account, right? Well, not exactly.
You can’t access your savings account through your debit card or an ATM. The money is actually coming out of a linked transaction account, which is covered below. 

So if you want to spend some of your savings, make sure you transfer it across to your accessible everyday account first. Usually, you can do this online or over the phone and generally speaking, you won’t be charged for transfers between your savings and everyday transaction account. It might seem like a hassle, but this extra step can be very useful in curbing impulse spending!

Alright, so what is it?

Basically, a savings account is a semi-accessible place to store the money you aren’t going to use day-to-day, but would like to have available for emergencies or big purchases. It’s a low risk way to earn a moderate amount of interest on the money you’ve worked hard to save up. A good savings account is a key part of your savings plan and can help you with building up the reserve for a holiday, renovation or just a nice, fat rainy day fund.

What should I look for in a savings account?

Choosing a savings account is a personal thing - what works for you might not work for the next person. But there are some things that are pretty universal, and we feel pretty confident recommending them to you. These are:

  • No monthly fee

Very few, if any, savings accounts charge monthly fees these days. A surge in online lenders pretty much took care of that, so if your account does, it’s definitely time to switch. Others like transaction fees or withdrawal penalties are a little more common, but there are still plenty of options without them, so make sure you find an account that will allow you to use your money how you want to, fee free.

  • A good ongoing interest rate

The point of using a savings account, as opposed to a regular old bank account is that you’ll earn more interest. So choose an account with a great interest rate - but remember that all savings account interest rates are variable and therefore subject to change.

  • Withdrawal flexibility

Most savings accounts let you withdraw money as you like, but it’s not always the case. 42 of the savings accounts in Mozo’s database will drop bonus offers if you make a withdrawal in the month, and 52 will charge a fee for over the counter withdrawals - but you can avoid that fee by using your debit card and linked transaction account.

  • A linked transaction account

Most savings accounts offer a linked everyday transaction account, and some even require them. While some savings accounts require a transaction account with the same bank, others will let you link to an account with any bank. Everyday accounts are often where you end up being hit with fees, so check out the features of the linked account and make sure it will let you use your money the way you want to.

  • Online banking

If you prefer to manage your money from behind your computer screen, a savings account with internet banking facilities is a must. Online banking is easy and quick - it lets you manage your savings from anywhere, at anytime. You can do things like make transfers, Bpay, check your account balance and even open new accounts, all from the comfort of your lounge room. Most savings accounts offer online banking options, and some are exclusively online - they also happen to have very competitive interest rates!

What are my savings account options?

There are plenty of options for finding a competitive savings account, and the first step is deciding which account is for you. You can check out our full guide on the types of savings accounts, or, if you’re pressed for time, here’s a quick rundown of the main savings account options.

Bonus Saver

Everybody loves a reward! There are two types of bonus reward rates you might be eligible for with your bonus saver account, an introductory bonus rate and a conditional bonus rate. 

Introductory bonus rates only last for a limited time (usually 3-6 months after you open the account) but have no other conditions. After the intro period, your interest rate will revert to a lower ongoing rate. Conditional bonus rates offer higher than average interest, as long as you play by the rules and meet certain conditions. Some conditions you could see include bundling products (for example, you might have a transaction account with the same provider), a minimum monthly deposit, or not making any withdrawals. 

Long Term

If you’re looking for a place to park your rainy day fund in the middle of a drought, this is it. A long term savings account is one with a high ongoing interest rate, so that you can leave your savings there for years and continue to earn a steady flow of interest. You’re looking for an option with high interest, no fees and easy access so you can keep an eye on things. 

High Interest

We return to the whole point of this savings account endeavour - earning more interest. High interest savings accounts offer some of the best rates around and will go a long way toward growing your cash stash. Most high interest savings accounts offer fee-free withdrawals, but something to keep in mind is that some require you to maintain a minimum balance or make a monthly deposit. If yours does, a good idea is setting up an automatic transfer to be sure the deposit is being made or the balance is high enough.

Kids accounts

Getting your kids into saving at a young age is one of the best things you can do for them. Kids savings accounts are generally for under 18’s, although some go up to 25 years of age and parents have full control of the account until the child is 16.

Kids accounts are child friendly, don’t have too many restrictions and a lot of banks offer fun graphics and charts to keep little savers motivated. Some of them offer pretty competitive rates, but others are pretty dismal, and it can sometimes be hard for kids to meet the conditions to get bonus interest rate offers.

If a savings account is not right for you…

Maybe you’re looking for a higher return on your money, you don’t mind not being able to use it for long periods of time, or you’d like the stability of a fixed interest rate. In this case, you could opt for a term deposit, which trades flexibility for higher returns on your money.

Or, on the other hand, you might want quick and easy access to your money and not really mind what interest it earns. You’re looking for a bank or everyday transaction account.

Compare savings accounts interest rates

So, are you ready to find yourself a cracker savings account deal? Head over to our savings account interest rates comparison page to find some of the best options on the market. 

While you’re there, don’t forget to check out our handy savings goal calculator to find out how far you are from that holiday or kitchen reno you’ve been saving for, and our savings calculator to check out what different interest rates can do to grow your money.

^See information about the Mozo Experts Choice Savings Accounts Awards

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