.High-interest savings accounts
While official interest rates are low, more competition in the deposit account market have led to rich pickings for savers. High-interest internet savings accounts have changed the way many of us save.
Promises of ‘no bank fees ever’ coupled with competitive rates and special deals seem to have struck a chord with Australian consumers.
They’ve also forced some of the bigger, more established banks to improve their offers in an attempt to stem the flow of customers leaving in search of higher rates.
Please note: this information was current as of January 2008 but is still a useful guide to today's market. For more recent information, see our Best online savings account 2011.
It could be worth switching
If you've got money parked in an everyday transaction account paying next to nothing interest, you could be earning much more by switching to an account with a better rate.
Internet savings accounts
If you’ve got web access, opening an account is reasonably straightforward and the interest rates are often much better than 'traditional' and 'bonus saver' accounts.
Iterest on the best term deposits is similar to the best internet savings accounts. Rates are fixed for the term. The drawback is you lose liquidity – early withdrawals are penalised with a break fee.
Cash management accounts (CMAs)
Alternatively (or in addition), you may prefer an account designed for both transactions and savings. Examples include CMAs (that usually require several thousand dollars to start an account or receive the higher interest rate) and other ‘hybrid’ accounts that combine higher interest with the ability to transact (for example, using ATMs, paying bills, using phone and internet banking for transfers).
'Traditional' savings accounts
Even when bonus rates are added, the rates on most traditional savings accounts often fall well short of the best term deposits, cash management accounts and internet savings accounts.