Compare high interest savings accounts up to 6.00% p.a.

What is a savings account?

A savings account is a banking product for anyone who wants to put some money away for a later time, separate from their everyday spending money. 

More importantly, it's somewhere you can safely deposit funds and earn interest on them over time, which in turn can help you meet whatever savings goals you might have.

There are a few types of savings account to choose from:

• Introductory rate: Get a high interest rate for the first few months before reverting to a lower base savings rate.
• Bonus rate: High interest savings accounts require you to meet certain monthly conditions to earn the bonus. If you don’t meet these conditions, the interest rate will revert to a lower base rate.
• Base or standard rate: The only condition for this kind of account is usually the balance limit. On average, standard rates are lower than the other two account types.

What is a high interest savings account?

A high interest savings account is any savings account that has an above-average interest rate. To help you see the difference, the Mozo research team has crunched the numbers from all the accounts we track in the Mozo database and provided a table of the ‘average’ savings rates below. 

Source: Mozo database, 1 December 2024

As illustrated, any savings account above a rate of 3.59% p.a. could be considered high interest currently. These numbers are important to keep in mind when reviewing savings accounts so you can find one of the best savings accounts for your situation.

How to choose the best type of savings account

Choosing the best type of savings account depends on a number of factors, including:

• the interest rate 
• the conditions 
• the features or accessibility of the account
• and, the bank provider.

What kind of savings rates should I look for?

This depends on your savings goals. Your options are as follows:

• Introductory rate. Some banks will offer a high rate of interest for a short introductory period to help you kickstart your savings, after which a lower base rate will be paid on an ongoing basis.
• Bonus rate. This is where you’ll get a higher rate of interest if you meet certain monthly criteria such as a minimum deposit or no withdrawals in the month. If you don’t meet the monthly criteria, your savings interest rate will drop to the lower base rate, and reset again the following month if you meet the conditions again. These bonus rate savings accounts can be great if you are actively saving each month. 
• Standard or base rate. This is the amount of interest you will earn on your balance no matter how many deposits or withdrawals or transactions you make. 

Look for the best features 

Once you’ve checked out the types of accounts, the next thing to consider is savings account features.

Most savings accounts are now 100% digital, accessible via phone banking, internet or an app. This means they often come with useful features such as: 

• Automatic payments - put your savings on autopilot and set up a regular deposit into your savings account.
• Round-up features - some accounts will round-up purchases to the nearest dollar and automatically put the extra funds into your savings account.
• Block and lock features - some apps allow you to block withdrawals to help you limit the temptation of digging into your savings for impulse buys.
• Split across goals - have short and long term savings goals. Some accounts will let you split your savings between each goal.
• No monthly fees 

What are some of the biggest traps with savings accounts? 

The most common trap of savings accounts is failing to meet the monthly conditions in order to receive the bonus or maximum interest rate.

Bonus rate conditions might include:

• Minimum deposit amount
• No withdrawals
• Minimum account balance
• Maximum account balance
• Mandatory purchases 
• Age limits (savings accounts for kids and teens)

Also, when you are putting together your savings plan, having realistic savings goals will help. 

What are the pros and cons of high interest savings accounts?

A high interest rate account can help you reach your savings goals faster—whether that be a home loan deposit or an emergency fund. However, while there are obvious advantages there can be some disadvantages too. 

Let's take a look below:

How do I earn interest on my savings?

Most savings accounts calculate earned interest daily, based on your closing balance. It is then paid out monthly – this is known as compound interest. So, the more you deposit into your savings account to grow your balance and the less you withdraw, the more interest you earn on your money. 

Generally speaking, savings account base interest rates are variable so they can fluctuate over time which is why it’s important to compare savings regularly. If you want to do some old school maths here’s how to calculate interest on a savings account or if time-saving is more your thing, check out our savings calculator.

Award-winning Savings Accounts

Every year, Mozo’s expert judges compare hundreds of savings accounts to find the best value accounts for different saver scenarios as part of the Mozo Experts Choice Awards. Only the top ranked accounts are awarded. 

In 2024, ING was named Everyday and Savings Bank of the Year and Great Southern Bank and Macquarie Bank were recognised as Exceptional Value Everyday & Savings Bank award winners. 

Categories of this year’s awards include:

• High interest savings
• No strings savings
• Kick start savings
• Young Adult, teen and kids savings 

You can check out all the winners and categories at the 2024 Mozo Experts Choice Savings Awards page. We also highlight products in our comparison table that are award winners.  

What's the difference between a transaction and a savings account?

Both savings and transaction accounts are options you have for keeping your money with a banking provider. Transaction or bank accounts are usually used for your everyday spending and as such these usually pay little or no interest. But they do come with a debit or ATM card. 

Meanwhile, savings accounts are designed to help you reach your savings goals. They usually have higher interest rates and are accessed via online banking or via a banking app. Keep in mind that they do not come with an ATM card.  

Is my money secure in a savings account?

Yes, the Australian government guarantees deposits of up to $250,000 with any one Authorised Deposit-taking Institution (ADIs) under the financial claims scheme. This means the government will reimburse any amount of $250,000 or under should the ADI (bank, credit union, etc.) fail.

If you’ve saved up more than $250,000, you’d need to keep smaller amounts of up to $250,000 in different banks for all your funds to be covered by the government's guarantee. 

How to open a savings account

Opening up a savings account is a pretty simple process, although there are a couple of things you’ll want to keep in mind. 

To start an account you’ll need to:

1. Select a provider
2. Apply online, by phone or at a branch
3. Upload or present identification documents (birth certificate, ID, etc.)
4. Choose whether you’ll get a single or joint savings account
5. Link your bank account to your savings account.