Mozo guides

What is a savings account?

pink piggy bank

Chances are you’ve been told sometime in your life that it’s important to have a savings account.

Unlike an everyday account that you use to pay bills or cover expenses, a savings account allows you to deposit money for safekeeping for future needs while earning some interest.

But why should you get one? And how do you pick one that fits exactly what you need? Below we have answered some of those pressing questions.

Reasons to use a saving account

piggy bank coins

A savings account is a good way to keep your money safe and could earn you some extra cash while it sits there. 

People have a savings account for different reasons. I personally have three accounts going: an emergency fund, a sinking fund and a general savings account. There is no limit on how many accounts you can have or what you use them for. 

Below are some ideas on why to open a savings account.

  • Prepare for emergencies
  • Buy big-ticket items or goals
  • Reduce temptation to spend
  • Help grow your credit score

What should I look for in a savings account?

man sits and thinks about savings account

Choosing a savings account is a personal endeavour that depends on your individual needs and situation. However, there are some pretty universal things that a good savings account should have. Check below to know what to keep in mind when looking for a new savings account.

No monthly fee:

It is rare to find a savings account that charges a fee these days. However, there could be things like minimum requirement fees, withdrawal penalties and transaction fees tied to an account. It's possible to find an account with absolutely no fees.

A good ongoing interest rate:

One of the main points of using a savings account instead of a regular everyday account is that you’ll earn more interest. So make sure to look for an account with a high interest rate. Just don’t forget that savings accounts usually have a variable interest rate so they are subject to fluctuation and change.

Withdrawal flexibility:

Most savings accounts let you withdraw money as you like, but that’s not always the case. 48 of the savings accounts in Mozo’s database will drop the bonus offers rate if you make a withdrawal in the month.

A linked transaction account:

Typically 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.

What are some savings account options?

hands on a piggy bank

There are many saving account options available in Australia, each with pros and cons. Below is a quick rundown of the main savings options you’ll find in the banking world.

Bonus saver

Who doesn’t love being rewarded? With bonus saver accounts you get conditional bonus interest rates if you meet specific criteria. This could be a minimum monthly deposit, not making a withdrawal in a month or having a certain balance in the account.

Long term savings

If you’re looking for a place to keep your rainy-day fund, then a long term savings account could be ideal for you. These accounts tend to have high ongoing interest rates, so you could leave your savings there for a couple of years. Alternatively, you could look into term deposit accounts.

High interest

High interest savings accounts offer some of the best rates around and could help to grow your money stash. Most of these accounts tend to offer fee-free withdrawals, but keep in mind that some require you to maintain a minimum balance or make a monthly deposit of a certain amount.

Kids account

It’s always a smart move to get your kids to start saving at a young age. Generally, kids saving accounts are for those under 18, but some go up to 25 years of age. Parents have full control of the account until the child is 16. Kid accounts don’t come with too many restrictions and tend to offer fun graphics and charts to keep little saver motivated.

If you are looking for the cream of the crop in savings accounts, check out the Mozo Expert Choices Awards for Bank Accounts. If you want to get started looking for your new savings account check out our savings account comparison chart below and get saving.

Savings Accounts Comparison Table - last updated 11 December 2023

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

  • Mozo Expert Choice Badge
    Savings Account

    5.50% 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 four months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.

  • Reward Saver

    5.25% p.a. (for $0 to $100,000)

    0.30% p.a.(for $0 and over)

    Yes up to $250,000

    Earn a high interest bonus rate if you hold an eligible transaction account and meet the bonus rate conditions (T&Cs apply). Only requires $1 to open. Free e-banking transactions. No monthly service fees to pay. Access your account via e-banking or the Bendigo Bank app. Not applicable to business customers.

  • High Interest Save Account

    5.10% p.a. (for $0 to $250,000)

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

    Yes up to $250,000

    Deposit at least $200 to either Spend or Save account from an external source each month.

    No monthly fees on any of your save accounts. Split your money with up to 10 Save accounts. Set savings targets and track the progress of all your Save accounts. Deposits guaranteed up to $250K per customer.

  • Mozo Expert Choice Badge
    High Interest Savings Account

    5.75% p.a. (for $0 to $250,001)

    4.40% p.a.(for $0 to $250,001)

    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.

Maria Gil
Maria Gil
Money writer

Maria Gil writes across all of our personal finance areas here at Mozo. Her goal is to help you think smarter about money and have more in your pocket. Maria earned a journalism degree in Florida in the United States, where she has contributed to major news outlets such as The Miami Herald. She also completed a masters of digital communications at the University of Sydney. When Maria isn’t busy with all things finance, you can find her tucked away reading fantasy books. She is also ASIC RG146 (Tier 2) certified for general advice.

^See information about the Mozo Experts Choice Savings Account Awards

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