.And the winner is…
UBank’s Usaver (from NAB) offered the largest return over 12 months (using our carefully plotted savings calculator). On top of this, the USaver comes with plenty of handy tools to help set savings goals, an easily accessible special rate that is not limited to an introductory offer and at the time of writing 6.01% for deposits all the way up to $1 million.
Want to know more about Better banking? Read CHOICE's report, delivered to Wayne Swan and the Senate earlier this month.
Also on offer
Arab Bank also offers high interest for large balances, unlike most providers that lower rates as balances climb. RaboDirect showed itself to be a true competitor with its competitive rates, and ME Bank also allows easy online applications and consistently high interest. ANZ’s SmartyPig will appeal to some with its innovative approach, but it may not be for everyone. The account leverages social networking websites like Facebook to allow others to contribute to your savings goal, which could be handy if you were planning a wedding and wanted a honeymoon registry.
SmartyPig also allows you to purchase vouchers directly with your savings account. You can purchase SmartyPig vouchers to be transferred to other SmartyPig accounts or you can purchase retail vouchers for stores like David Jones or JB Hifi with a 4-8% savings boost. This could be useful if you’re saving for a specific item and know where you want to buy it from (a TV from JB Hifi, for example), but once the money is transferred, you face all the drawbacks of gift cards - expiry dates, remainder balances that are often hard to spend and more.
The following scenario is designed to test online savings accounts in terms of flexibility and the amount of interest earned with a simple savings plan, starting from $0. Historical interest rate data, date of rate changes and account details were supplied by Mozo.com.au and confirmed with institutions (including dates new interest rates applied to make the results as accurate as possible). Non-introductory special rates were included where applicable.
In this scenario, accounts were:
Opened on 15th February 2010. Every Wednesday, starting from the 17th February 2010, $100 is deposited into the account.
Every four months, on the first of the month, $200 is withdrawn.
Interest is calculated according to each account’s conditions (calculated daily, paid monthly except SmartyPig which calculates daily and pays quarterly).
Interest rates were plotted according to the relevant calendar dates until account closing date of February 15th, 2011.