Need to know
- The highest rates for high interest savings accounts are currently only 1%
- Online banks and smaller banks are ahead of the pack with interest rates, with Westpac, ANZ, CBA and NAB trailing behind
- High interest savings accounts can come with tricky and very restrictive conditions
There's nothing "high" anymore about the interest rates on high interest savings accounts. They're down in line with record low cash rates (or the official interest rate set by the RBA – now at 0.1%). So where can you find value for your hard-earned cash?
Online banks – the new kids on the block – currently offer the highest ongoing available interest rate of up to 1.5%. Smaller banks offer rates of up to 1.6% but these sometimes come with tricky conditions.
The big banks – CBA, Westpac, ANZ and NAB – offer rates o 0.3% to 0.4% ;on their bonus saver accounts. Apart from the low rates the catch is:
- you need to make a deposit each month
- ANZ and NAB do not allow any withdrawals in the month
- Westpac and CBA require a higher account balance at the end of the month
- if you don't meet all conditions your rate slips down to an only just above zero interest rate of 0.01% to 0.05%. Westpac treats their customers slightly better with a rate of 0.2%.
A little extra interest can go a long way in the long run.
How to make your savings count
- High interest accounts give you a much better return than one of the big banks' transaction or savings accounts.
- Don't fall for teaser accounts, for example from ANZ, CBA, Westpac and NAB – they pay a higher rate at first and revert to a low rate.
- If you have a home loan, a 100% offset account can be a good place for your savings.
- If you have a credit card debt, using a low interest credit card and paying it off should normally be your first priority.
- Check the bonus rate conditions, sometimes they're quite complex – do they suit you or will you be left with the low standard rate?
High interest accounts by ongoing rate
(Last updated 14 April 2021)
- Volt Save – 1%. Balances up to $245,000. (A)
- Macquarie Savings Account – 0.95% (1.1% first four months). Lower interest rate for $250,000 and above.
- Heritage Bank Online Saver – 0.65% (0.95% for first four months for balances up to $100,000).
- Auswide Bank Online Saver – 0.65%.
- Move Bank Express Saver – 0.65%.
High interest accounts by bonus rate
(Last updated 14 April 2021)
- ING Savings Maximiser – 1.35% (0.05% standard rate). Bonus rate condition: Every month deposit at least $1000 from an external bank account to Orange Everyday account, make at least five card purchases with debit card and have a higher balance at the end of the month. Balances up to $100,000. (A)
- AMP Bank Saver Account – 1.25% (0.10% standard rate). Bonus rate condition: Make a $250 deposit each month. Balances up to $250,000.
- 86400 Save (A) – 1.20% (0.05% standard rate). Bonus rate condition: Make a $1000 deposit to any of your Pay or Save accounts each month to receive the Bonus interest on all of your Save accounts. Balances up to $50,000 per account – three accounts available per person.
Notes: (A) Online bank, sometimes called a neobank. Account can only be accessed through Android or iOS (Apple) app and sometimes internet banking. All of them have recently received a full banking license by APRA and the government $250,000 deposit guarantee applies to them.
Interest rates from ANZ, CBA, NAB and Westpac
- ANZ Online Saver – 0.35% for the first three months, then 0.05% standard rate.
- ANZ Progress Saver – 0.4% (0.01% standard rate). Bonus rate condition: Deposit of $10 or more and no withdrawals per month.
- CommBank Netbank saver account – 0.4.% for the first five months, then 0.05% standard rate.
- CommBank Goal Saver account – 0.3% (0.05% standard rate). Bonus rate condition: Higher account balance at end of the month compared to the start of month.
- NAB iSaver – 0.35% for the first four months, then 0.05% standard rate.
- NAB Reward Saver – 0.3% (0.01% standard rate). Bonus rate conditions: One deposit and no withdrawals each month.
- Westpac eSaver – 0.4% for five months, then 0.05% standard rate.
- Westpac Life – 0.4% (0.2% standard rate). Bonus rate condition: One deposit and higher account balance at the end of the month. 3% for people aged 18–29 years old who used their debit card five times a month for eligible purchases for up to $30,000 – after that standard rates apply.
How much interest can you earn?
What you'd earn if you paid $100 a week for one year:
- $0.26 – transaction account that pays 0.01% interest
- $13 – account that pays 0.5% interest
- $39 – high-interest account paying 1.5% interest
- $116 in the first year – mortgage offset account with a standard variable rate of 4.39% (savings based on a 100% offset account associated with a 25-year $400,000 home loan). NB: Savings will continue to accrue over the life of the loan even if you withdraw the $5200 at the end of the year.
High interest account traps
Many high interest accounts offer high interest rates for an introductory period. Often those intro rates revert to very low rates after a short period.
CHOICE tip: Accounts with a 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.
Many accounts – often called bonus saver accounts – give you a special rate if you make a minimum deposit such as $200 per month. Check the standard rate the account reverts to when you don't meet the bonus rate conditions.
Minimum deposit conditions are often paired with no withdrawals. Beware of accounts that revert to a low standard rate.
Some accounts only apply a bonus rate to accounts below a limit.
Some accounts work similarly to a term deposit – you need to give a certain number of days' or months' notice before withdrawing your funds.
Some accounts have very complex conditions for their bonus rate.
For example, ING Savings Maximiser pays the bonus rate only if you:
- have an Orange Everyday account
- deposit at least $1000 from an external bank account to the Orange Everyday account
- make at least five settled card purchases using an ING debit card each month
- have a higher amount in your account at the end of each month.
CHOICE tip: Make sure you only use such an account if you can fulfil its conditions without going out of your way.
Linked transaction accounts
High interest accounts normally don't charge a monthly fee, but most need to be linked to a transaction account for deposits and withdrawals. Some will only let you link to an account with the same institution, while others let you use any transaction account.