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What is a savings account?Outstanding value savings account

A savings account is simply a bank account that you use to accrue interest, growing your initial deposit. Savings accounts are a great way to save towards a goal.

Some investors, such as those with a self-managed super fund, use a savings account as part of their investment portfolio, in order to guarantee receiving some kind of return on their money.

The rate at which your savings account increases is determined by the interest rate offered.

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How CANSTAR compares saving accounts

CANSTAR compares saving accounts from across the industry, using a sophisticated methodology to examine hundreds of individual products from more than 80 institutions.

With interest rates at record lows, finding the highest interest rate for a savings account is vital. You can compare interest rates for different types of savings accounts using our handy comparison tool at the top of this page.

There are a few basic things to look for in a savings account, depending on your financial needs:

  1. High interest rate (beware of high introductory rates that revert to lower rates)
  2. Low fees
  3. Free transactions or fee rebates
  4. Accessibility of branches and ATMs if necessary
  5. Features such as suitable minimum or maximum deposit amounts

Some common fees to look out for on savings accounts are:

  • Monthly account-keeping fees
  • eftpos fees
  • Electronic transaction fees
  • ATM withdrawal fees from your own bank and other banks
  • Branch deposit fees
  • Over-the-counter transaction fees

The good news is that most savings accounts won’t charge fees for electronic transfers, and you can usually waive the monthly account-keeping fee simply by depositing a certain amount each month.

When we have realistic goals for our savings and we know what to look for when choosing a savings account, we can do quite well for ourselves. You can make a plan today for building your savings for the future, using our CANSTAR Savings Plan Calculator and Budget Planner Calculator.

If you’re struggling to save and would prefer advice on how to budget to meet your regular financial needs, head on over to our Budgeting & Saving guide. You’ll find all our best hints and tips to help you survive and thrive financially.

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Written by: TJ Ryan & Tim Smith

Savings account glossary of terms

Please note that these are a general explanation of the meaning of terms used in relation to savings accounts. Your bank or financial institution may use different terms, and you should read your product disclosure statement (PDS) carefully to understand everything that may apply to your account. You cannot rely on these terms in relation to any savings account you may open.

Account-keeping fees: An ongoing fee charged to cover or partially cover the bank’s internal costs of creating and maintaining the account.

Annual equivalent rate (AER): A rate that can be compared between lenders, which shows what the interest rate would be if interest was paid and compounded once each year. Any advertisement for a savings product that quotes an interest rate must also quote the AER so that you can compare what return you could expect over time.

Basis points: A unit of measurement used in financial situations to describe the percentage change in interest rates or the value of a financial product. One basis point is 0.01% or 0.0001 in decimal form.

Bonus savings account: Accounts that give bonus interest whenever the accountholder makes no withdrawals and deposits a certain amount of money into the account (usually around $50 or $100).

Cash management account: A savings account for high balances (usually $10,000 – $20,000) with a higher interest rate and the flexibility of a transaction account.

Debit card: A card that is linked to a transaction account and allows the cardholder to make transactions with merchants and withdrawals from ATMs. Also known as a bank card or cheque card.

Deposit: Money that you put into an account with a financial institution.

Introductory rate: An introductory bonus offer where a variable interest rate applies to the account for a set time period. At the end of the bonus period, rates revert to the base rates.

Junior savings account: Savings accounts for children. A parent or guardian operates the account in the child’s name but the child also has access to their account. View our Junior Banking Award for under 12s and Youth Banking Award for under 18s on our website.

Online savings account (OSA): A savings account that is primarily managed on the internet.

Promotional rate: An interest rate which is only offered during a specified promotional period. When the promotional period ends, the interest rate will generally revert to the base rate. Similar to an introductory rate.

Transaction account: A deposit account that serves the purpose of providing frequent access to funds in your account for debit card transactions made through eftpos at merchants, branches, ATMs, and also for the use of cheques. A transaction account is different to a savings account because it is not designed to grow your savings with interest.

Withdrawal: When you take money out of your account, e.g. getting cash out of an ATM.

Yield: The rate of return earned on an investment.

Savings account providers we research and rate

At the time of our latest star ratings of savings accounts, the savings account product providers we researched and rated included the following:

  1. ADCU
  2. AMP Bank
  3. ANZ
  4. Arab Bank Australia
  5. Bank Australia (formerly known as bankmecu)
  6. Bank of Melbourne
  7. Bank of Sydney
  8. BankSA
  9. BankVic
  10. Bankwest
  11. bcu
  12. Bendigo Bank
  13. Beyond Bank
  14. BOQ
  15. Cairns Penny
  16. Catalyst Money
  17. Citibank
  18. Coastline Credit Union
  19. Commonwealth Bank
  20. Community First Credit Union
  21. Community Mutual Group
  22. CUA
  23. Defence Bank
  24. Delphi Bank
  25. Easy Street Financial Services
  26. ECU Australia
  27. Encompass Credit Union
  28. FCCS Credit Union
  29. First Option Credit Union
  30. G&C Mutual Bank
  31. Gateway Credit Union
  32. Greater Building Society
  33. Heritage Bank
  34. Holiday Coast Credit Union
  35. Horizon Credit Union
  36. HSBC
  37. Hume Bank
  38. Hunter United
  39. Illawarra Credit Union NSW
  40. IMB
  41. ING Direct
  42. Intech Credit Union
  43. Macquarie Credit Union
  44. ME Bank
  45. MyState
  46. NAB
  47. Newcastle Permanent
  48. Northern Beaches Credit Union
  49. People’s Choice Credit Union
  50. P&N Bank
  51. Police Bank
  52. Qantas Credit Union
  53. Qld Police Credit Union
  54. Qld Professional Credit Union
  55. QT Mutual Bank
  56. Quay Credit Union
  57. Queenslanders Credit Union
  58. Rabobank Australia
  59. RaboDirect
  60. RAMS
  61. Rural Bank Ltd / Rural Bank ONE
  62. SCU
  63. Select Credit Union
  64. SERVICE ONE Alliance Bank
  65. George Bank
  66. Summerland Credit Union
  67. Suncorp Bank
  68. Teachers Mutual Bank
  69. The Capricornian
  70. The Mac
  71. The Mutual
  72. The Rock Building Society
  73. Transport Mutual Credit Union
  74. UBank
  75. Unicredit WA
  76. Victoria Teachers Mutual Bank
  77. Westpac
  78. Wide Bay Australia

For more information on how CANSTAR rates savings accounts, read our latest star ratings report.

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