01.Beat the banks
Westpac now pays their customers zero interest on transaction accounts, the other major banks pay a meagre 0.01%. You can beat the banks by linking an high-interest account to your transaction account or using a home loan offset account. Rates on high-interest accounts have gone down over the last year, and the best rates have fallen furthest, but there are still some good options around.
"The average ongoing rate for a savings account at the start of 2014 was 2.94% and the best rate was 4.62%. The average rate now is 2.88% (down 6 basis points) and the best is 4.17% (down 45 basis points)," explains Peter Marshall, Product Data Manager from Mozo.
Marshall recommends UBank's Ultra account – while the account works like a transaction account and pays no interest, it has a built-in "sweep" facility that automatically transfers extra funds into a high-interest saving account.
He also points to the CBA bonus saver account that allows one withdrawal each month (as always with bonus saver accounts you need to make at least one deposit per month for the bonus interest to apply). Usually bonus saver accounts - like the ones from ANZ, NAB and Westpac - don’t pay bonus interest once you make a withdrawal in the month.
Top high interest accounts
The best online saver accounts on the Mozo database are:
Top 3 savings accounts by standard rate
- 3.75% - Virgin Saver, Virgin Money
- 3.50% - Online Savings Account, only available if you have a transaction account, home loan or credit facility with Newcastle Permanent
- 3.25% - ONE Saver, Rural Bank, allows pay anyone
Top 5 savings accounts by bonus rate
- 4.17% (3.11%) - USaver with Ultra Transaction Account, UBank (from NAB). Must link a USaver account to a UBank Ultra transaction account; minimum $200/monthly deposit into either account, unlimited withdrawals allowed.
- 4.11% (2.81%) - Saver, RAMS. Minimum monthly deposit of $200 and no withdrawals.
- 4.02% (0.27%) - Online Saver, ADCU. Bonus rate on balances over $5,000 when no withdrawals are made in the month.
- 4.00% (0.01%) - HeroSaver, Bankwest. Minimum monthly deposit of $200 and no withdrawals.
- 4.00% (2.75%) - eSaver Plus, CUA. Minimum monthly deposit of $200 and no withdrawals.
How much can you earn?
- 50 cents: Interest earned on $5000 using 0.01% interest transaction account over 12 months.
- $200: Interest earned on $5000 using 4% high-interest savings account over 12 months.