What Are High-Interest Savings Accounts?
High-interest savings accounts are bank accounts that will pay you a higher interest rate on your savings, or balance, each month when you meet certain conditions, or for a certain period of time. They are designed to help you grow your savings faster, in comparison to a transaction account which may or may not offer any interest per month.
Commonly, savings accounts are digital accounts that don’t have a debit card attached to the account, meaning it’s not as easy to spend with them. Instead, your money stays with the bank, which rewards you with the interest on a monthly basis–usually pending certain conditions.
Let’s look at the two most common types of high interest savings accounts: bonus saver accounts and online saver accounts.
Online Saver Accounts vs Bonus Saver Accounts
Online Saver Accounts
An online saver account is one that pays you a high interest each month simply for having your money in the account, usually with no monthly or annual fees. Often these accounts feature a very high introductory rate for a limited period of time–such as 4% for the first three months.
After that introductory period, the interest rate will fall away to a much lower rate. That means that while online saver accounts can be beneficial, you may not end up receiving a higher interest rate long-term–and could be better off putting your money in a bonus saver or fixed-term deposit instead. You can readour guide on fixed term depositsto determine whether they’re right for you.
Bonus Saver Accounts
A bonus saver account, on the other hand, pays you a high interest rate each month with no expiration date, as long as you meet certain criteria. If you don’t, you’ll receive the base interest rate, which is usually quite low. Hence, when you meet the criteria, you get a ‘bonus’. This base interest rate, plus the bonus rate, is what makes up the total monthly interest rate of bonus saver accounts. While there is no time limit, or ‘introductory offer’, on the bonus saver account rates, you must continue, month after month, to jump through a number of hoops in order to keep qualifying for that higher bonus rate.
The specific criteria for bonus interest savings accounts vary between financial institutions. Commonly they can include a minimum monthly deposit, making a certain amount of transactions from a linked card, or making a maximum of one withdrawal a month.
Savings High Interest Accounts Versus Term Deposits
As explained, a savings account will pay you interest each month if you meet the conditions set out by the financial lender (if there are any conditions). This interest will continue to be paid for as long as you hold funds in the account, with the interest rate subject to change on account of any RBA rate movements.
Aterm deposit, on the other hand, has an interest rate that will not fluctuate for a set period of time–being the ‘term’ that you agree to. Unlike a savings account, you can’t withdraw any money; the amount of money you put into the term deposit is untouchable until the term is finished.
In return, you’ll get a guaranteed rate of interest for the term you select, so you’ll know exactly what the return on your money will be.
After the term has ended, you can choose to enter into a new fixed deposit term (which may have a new interest rate), or withdraw your money without being charged an early-withdrawal fee.
Related:How To Save Money
Best Savings Accounts for Australians
Below are a handful of the best savings accounts we’ve found for Australians this month, including their interest rates and any conditions which must be met.
The list below is not intended to be exhaustive or cover all of the high interest savings accounts in the market, but it may act as a starting point for further research or even notify you of products of which you were unaware. As always do your own research as to the right savings product for you, your finances and your spending habits.
Related: A Guide To Bank Interest Rates In Australia
Note: The below list represents a selection of our top category picks, as chosen by Forbes Advisor Australia’s editors and journalists. The information provided is purely factual and is not intended to imply any recommendation, opinion, or advice about a financial product. Not every product or provider in the marketplace has been reviewed, and the list below is not intended to be exhaustive nor replace your own research or independent financial advice. For more information on how Forbes Advisor ranks and reviews products, including how we identified our top category picks, read the methodology selection below.
Data is accurate as of March 22, 2024.
FEATURED PARTNER OFFER
ING Savings Maximiser
Type
Bonus Saver
Maximum Interest Rate
5.50%
Type
Bonus Saver
Maximum Interest Rate
5.50%
Conditions
- Must deposit $1,000 to any personal ING account in your name and make five eligible transactions on ING card purchases each month.
- Must grow your nominated Savings Maximiser balance so that there is a higher balance in it at the end of the current month (excluding interest) than there was at the end of the previous month.
- 5.50% interest rate is available up to balances of $100,000.
- If the monthly conditions are not met, the interest rate for the ING Savings Maximiser is a lowly 0.55%.
Read More: ING Savings Maximiser Review
May suit
Active savers who can keep tabs of their deposits.
FEATURED PARTNER OFFER
ANZ Plus ‘Save’ Account
Type
High Interest
Maximum Interest Rate
4.90%
Type
High Interest
Conditions
- No monthly deposit conditions apply.
- 4.90% is paid on balances under $250,000.
- On balances over $250,000, a rate of 3.75% applies.
Read More: ANZ Plus Save Review
May suit
Savers without a regular income.
FEATURED PARTNER OFFER
MOVE Bank Growth Saver
Type
Bonus Saver
Maximum Interest Rate
5.50%
Type
Bonus Saver
Maximum Interest Rate
5.50%
Conditions
- Deposit at least $200 each month.
- Make zero withdrawals within the month.
- Balance cannot exceed $25,000.
- If the monthly conditions are not met, the base rate of 0.10% will apply.
May suit
Low-income workers.
FEATURED PARTNER OFFER
Bank of Queensland Future Saver Account
Type
Bonus Saver
Maximum Interest Rate
5.50%
Type
Bonus Saver
Maximum Interest Rate
5.50%
Conditions
- Only available to customers aged between 14-35 years old
- Must deposit $1000 and make five eligible transactions via the linked Everyday Account each month
- The 5.50% is only available up to $50,000; accounts with balances between $50,001 to $250,000 have a bonus interest rate of 3.00%
- If the monthly conditions are not met, the interest rate for the Bank of Queensland Future Saver Account is 0.05%
May suit
Younger savers.
FEATURED PARTNER OFFER
Virgin Money Boost Saver
Type
Bonus Saver
Maximum Interest Rate
5.35%
Type
Bonus Saver
Maximum Interest Rate
5.35%
Conditions
- Deposit at least $2,000 into your linked Virgin Go Account from another financial institution and make five purchases that are settled–not pending–in that month.
- Maximum combined balance of all Boost Saver accounts can not exceed $250,000.
- Virgin’s ‘Lock Saver Feature’, where you cannot withdraw funds unless providing 32 days notice, must be activated to receive the highest variable interest rate of 5.35%.
- If the monthly conditions are not met, the interest rate for the Virgin Money Boost Saver is 0.05%.
May suit
Savers who make infrequent withdrawals.
FEATURED PARTNER OFFER
Macquarie Savings Account
Type
Introductory Saver
Maximum Interest Rate
5.35%
for the first four months
Type
Introductory Saver
Maximum Interest Rate
5.35%
for the first four months
Conditions
- No monthly deposit conditions apply.
- 5.35% introductory interest rate is only available for the first four months.
- Balance cannot exceed $250,000.
- Interest reverts to 4.75% after introductory period.
May suit
Savers prepared to shop around after four months.
FEATURED PARTNER OFFER
Great Southern Bank Advantage Saver
Type
Bonus Saver
Maximum Interest Rate
4.85%
Type
Bonus Saver
Maximum Interest Rate
4.85%
Conditions
- Balance must grow by $250 each month.
- Highest possible interest rate of 4.85% is only available to balances under $100,000
- Balances between $100,000 and $700,000 receive 4.70%
- If the monthly conditions are not met, the base interest rate for the Great Southern Bank Advantage Saver is 0.10%.
May suit
Savers growing their balance each month.
FEATURED PARTNER OFFER
Rabobank High Interest Savings Account
Type
Introductory Saver
Maximum Interest Rate
5.75%
for the first four months
Type
Introductory Saver
Maximum Interest Rate
5.75%
for the first four months
Conditions
- No monthly deposit conditions apply.
- 5.75% introductory interest rate is only available for the first four months.
- Balance cannot exceed $250,000.
- Interest reverts to 4.40% after first four months.
May suit
Savers prepared to shop around after four months.
Frequently Asked Questions (FAQs)
What is a high interest savings account?
A high interest savings account is one in which you receive a high rate of return on your savings within the account. The high interest rate may apply for a set period only—four months is common in Australia—before reverting to a lower rate or there may be no expiry date on the high rate provided savers meet a set criteria each month. Many top high interest savings accounts are offering rates of more than 5% as of March, 2024.
Is it worth having a high-interest savings account?
A high-interest savings account can help you be more diligent with your money, and can help you earn interest on your funds, too. A lot high-interest savings accounts come with certain monthly criteria, meaning you need to meet said criteria in order to receive the high-interest.
If you aren’t prepared to meet the monthly criteria, and to pay attention to making sure that you do, then having a high-interest savings account is a pointless endeavour considering you won’t earn the high-interest. If you are prepared and capable of meeting the monthly criteria, then a high-interest savings account can be highly beneficial.
What is the difference between a high interest savings account and a transaction account?
A high interest savings account is distinct from a transaction account in that your money earns interest each month, while transaction accounts, commonly referred to as everyday accounts, are used to pay bills and receive wages and are generally linked to an ATM card. A high interest savings account, on the other hand, may be linked to your transaction account via online banking, but it is commonly used by savers to earn interest and accrue a rainy day fund. Commonly, savers need to meet a set criteria to qualify for the higher interest rate on a high interest savings account, such as a minimum number of transactions each month.
What are the best accounts for savings?
It’s possible to save with a range of different high interest savings accounts. These days, many financial institutions offer multiple accounts targeted towards helping their customers save money. Often, these savings accounts suit different people for different needs—there may be accounts that target certain age groups, savings goals, such as purchasing a house; or those with flexible monthly conditions for savers whose pay cheque is irregular.
Ultimately, the best account for savings is an account that you can accrue a healthy interest rate on–rather than a regular transaction account—and has conditions that you find easy enough to meet each month.
What are the best savings account to earn interest?
High-interest saving accounts–often known as Bonus Saver accounts–are usually the best type of accounts to open in order to grow your savings with interest. In exchange for meeting certain monthly criteria, a bank will reward its customers with a much higher monthly interest rate than a regular savings account. This rate can be as high as 5.50% in some cases.
If you would rather put your money away and not have to think about it while it accumulates interest, a term deposit may be more suitable for you.
Related: Guide To Term Deposits
What are the best interest rates on savings accounts?
Due to the RBA rate rises over the past year, interest rates on savings accounts have been increasing rapidly. At the time of writing, the highest savings account interest rate on the market is currently 5.15%.
Can I open a savings account for my child?
Starting a savings account at a young age is never a bad idea, as it helps to teach children the importance of financial literacy. Depending on your child’s age and the financial institution you wish to bank with, you may be able to open a kid’s savings account.
Many savings accounts for children have a minimum and maximum age limit attached to them, so it’s best to shop around and see which option would suit your child’s needs. Some accounts can even be opened when your child is only a baby.
What banks have the best savings accounts?
Forbes Advisor analysed a range of savings accounts to find the best options for Australia. Through the analysis it was made clear that many accounts have the same monthly conditions: a certain deposit each month along with a set number of transactions.
However, some accounts–like the Move Bank Growth Saver–require you to make zero withdrawals within the month, while others–such as the Bank of Queensland Future Saver Account–are only available for individuals aged 14-35 years old.
Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circ*mstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Sophie VenzEditor
Sophie Venz is an experienced editor and features reporter, and has previously worked in the small business and start-up reporting space. Previously the Associate Editor of SmartCompany, Sophie has worked closely with finance experts and columnists around Australia and internationally.
