Need to know
- Interest rates on bank deposit accounts are going up, meaning there are now more benefits to old-fashioned saving
- Some accounts will pay you interest with few or no conditions – others will give you a better rate, but come with specific requirements
- Before making a deposit, check that you can meet any conditions and whether your savings would be better off elsewhere
Australia's cash rate has been rising for the last year and a half, meaning the interest rates on deposit accounts at banks across the country are also on the up.
They may still not be as sexy as some modern investments, but high-interest savings accounts, whose yearly rates were previously languishing at below 1%, are now finally starting to live up to their name, with rates approaching 6%.
As the money market shows some life, now could be a good time to revisit this long-time savings favourite and see which banks are offering the best rates. Luckily, we've filtered through the terms and conditions for you to find the best high-interest savings accounts worth considering.
High-interest savings accounts are bank accounts that pay you a higher rate of interest on the money you put in them. This interest is represented as an annual rate, but you'll receive it into your account monthly.
Because they offer higher rates than most other bank accounts, many of these products come with conditions, such as depositing a certain amount each month.
Like regular savings accounts, they're also usually online and aren't connected with a credit or debit card, so it's not as easy to dip into your savings.
In order to get one of these accounts, you'll often also have to open a transaction account at the same bank.
You get more money for your deposit in a high-interest savings account than in a regular savings or transaction account.
How to know where to put your savings
But before you go switching accounts to cash in on the rising rates, pause to consider the best way to make your savings count:
- When choosing which high-interest option to go for, don't fall for teasers (i.e. accounts that offer generous interest, but only for the first few months) or options with deposit or transaction conditions that you might find hard to meet.
- If you have debts owing to buy now, pay later (BNPL) services or credit cards, your first priority should be to pay them off before putting money aside for saving.
- If you've got a mortgage, a 100% offset account might be a better destination for your cash – keeping your money here can help you reduce the amount of interest you pay over the life of the loan.
These accounts offer the best ongoing annual interest rates without requiring you to make any regular deposits or transactions.
(Last updated 16 October 2023)
- MoneyMAX Account (Unity Bank) – 5.00%
- ANZ Save (ANZ Plus) – 4.65%. On balances up to $250,000. Exclusive to the ANZ Plus app and not accessible through standard ANZ online banking.
- Savings Account (Macquarie) – 4.50%. On balances up to $1,000,000. An introductory rate of 5.40% is available for the first four months. Requires you to also have a Macquarie transaction account.
- Cash Management Accelerator Account (Macquarie) – 4.50%. On balances up to $2,000,000. Requires you to also have a Macquarie cash management account.
- Simple Saver Account (Bank of Queensland) – 4.50%. On balances up to $5,000,000.
Able to make a few concessions with your money without breaking your budget? These accounts top the savings rate market, but require depositors to make certain sized deposits and numbers of transactions in return.
(Last updated 16 October 2023)
- HomeME Savings Account (ME) – 5.65%. On balances up to $100,000. Conditions: Deposit at least $2000 into a linked SpendME account and have a higher closing balance than the previous month. This account is also exclusive to the ME's GO app and can't be accessed via the bank's website.
- Savings Maximiser (ING) – 5.50%. On balances up to $100,000. Conditions: Deposit at least $1000 each month into a linked Orange Everyday account, make at least five settled purchases with an ING debit or credit card. The savings account must also have a higher closing balance than the previous month (excluding interest). Can only apply to one account.
- Future Saver Account (Bank of Queensland) – 5.50%. On balances up to $50,000. Conditions: Must be 14–35 years old. Deposit at least $1000 (cash and cheques not included) into and make five eligible transactions from a linked Everyday Account every month.
- Growth Saver (MOVE Bank) – 5.50%. On balances up to $25,000. Conditions: Deposit at least $200 and make no withdrawals every month.
- Target Saver (Teachers Mutual Bank) – 5.50%. Conditions: Deposit at least $1000 every month, make no withdrawals and keep the account in positive balance at all times.
- Target Saver (Health Professionals Bank) – 5.50%. Conditions: Deposit at least $1000 every month, make no withdrawals and keep the account in positive balance at all times.
- Target Saver (Firefighters Mutual Bank) – 5.50%. Conditions: Deposit at least $1000 every month, make no withdrawals and keep the account in positive balance at all times.
- Target Saver (UniBank) – 5.50%. Conditions: Deposit at least $1000 every month, make no withdrawals and keep the account in positive balance at all times.
- Target Saver (Hiver) – 5.50%. Conditions: Deposit at least $1000 every month, make no withdrawals and keep the account in positive balance at all times.
They've historically lagged behind the new, online-only banks on deposit rates, but Australia's major lenders are now starting to offer more competitive savings options on their bonus rate products. Here's what you could be getting if you're a customer at one of the big four:
(Last updated 16 October 2023)
- ANZ Plus Save – 4.65% (see details above)
- Progress Saver – 4.25% (requires a minimum $10 deposit in one transaction each month and no withdrawals, otherwise it reverts to 0.01%)
- Online Saver – 1.60% (3.40% for the first three months)
- GoalSaver – 4.65% (requires at least one deposit and a growing account balance each month, excluding interest and bank-initiated transactions, otherwise it reverts to 0.40%)
- NetBank Saver – 2.20% (4.75% for the first five months)
- Reward Saver – 4.75% (requires at least one deposit and no withdrawals each month, otherwise it reverts to 0.35%)
- iSaver – 2.00% (4.75% for the first four months)
- Life – 4.75% (requires at least one deposit and a growing balance each month, otherwise it reverts to 2.00%) (18–29 year olds with this account can earn 5.20% if they meet the previous criteria and make five eligible purchases with the debit card linked to their Westpac Choice account)
- eSaver – 1.10% (4.75% for the first five months)
If you had $1000 in an account and deposited $100 into it each week for a year, you would earn…
$36 in an account earning 1.00% interest
$90 in an account earning 2.50% interest
$163 in an account earning 4.50% interest.
$181 in an account earning 5.00% interest
$199 in an account earning 5.50% interest
As we've mentioned, some high-interest savings accounts come with a web of conditions and caveats. You should be aware of these and be able to meet them where you can if you want to make the most of the recent rate hikes.
'Teaser' accounts make a big show of offering rates as high as 5.60% with no conditions – only to reveal in the fine print that holders will enjoy this rate for just the first few months.
There are quite a few of these out there, so always look at the details of the deal before you park your cash and be prepared to move your savings elsewhere if you don't want to be hit with a lower base rate.
CHOICE tip: Accounts with a short-term bonus rate can work for you if you need a place to park your money for the short-term, as they're more flexible than a term deposit.
Minimum monthly deposits
Many accounts that offer a top-shelf rate will make you work for it, requiring you to make set monthly deposits into it.
For some banks, the bar for these contributions is as high as $2000, so make sure you can afford to make these sorts of concessions before chasing these higher rates.
No withdrawals and positive balances
These minimum-deposit conditions often come paired with a "growing balance" clause, which slashes your rate to next to nothing if you make a transfer and leave the account holding less money than the previous month. Others only provide bonus rates if you make no withdrawals at all.
Be prepared to leave your money untouched for a while if you want to reap some serious interest
If your account comes with these conditions, be prepared to leave your money untouched for a while if you want to reap some serious interest.
Linked accounts and mandatory purchases
Quite a few of the best savings options currently on the market require you to have a transaction or cash management account with the bank you're saving with.
In the age where you can set up a bank account online, this is a relatively simple task, but you might also have to make a minimum number of purchases using the card linked to that account every month if you want to keep your rate up.
CHOICE tip: Make sure you only use this sort of account if you can fulfil its conditions without inconveniencing yourself or your budget.
We've decided to overlook a few accounts that would have made it onto our list because their competitive rates are only available to children or younger adults.
Always check you're putting your money somewhere that's age-appropriate.
While interest rates have gone up over the last eighteen months, we're concerned they're not flowing through to savers (who benefit) as much as they are to mortgage holders and borrowers (who don't).
The ACCC is currently examining the interest rates on deposit products such as savings accounts and how they compare to those on loans, after noting that the changes to saving rates had been "smaller or conditional".
While interest rates have gone up over the last eighteen months, we're concerned they're not flowing through to savers (who benefit) as much as they are to mortgage holders and borrowers (who don't)
CHOICE is weighing in on this issue and has made some recommendations to the ACCC regarding what we would like to see change.
This includes banks being required to ensure they're offering fair value on deposits, moving customers to their best savings rate and making it easier to close accounts.
The ACCC will hand down its recommendations to the federal government in December. In the meantime, read more about our submission.
Stock images: Getty, unless otherwise stated.