Best high interest savings accounts in Australia
If you’re looking to boost your savings you might be interested to know who’s offering a good interest rate. We round up the top high interest savings accounts on our database.
If you’re looking to boost your savings you might be interested to know who’s offering a good interest rate. We round up the top high interest savings accounts on our database.
The Reserve Bank of Australia (RBA) has held the cash rate steady in the last few months, it is still the highest point that the cash rate has been set in the past 11 years. While this means many home loan borrowers may still be experiencing increased mortgage repayments, savers continue to enjoy better returns on their deposits.
Highest ongoing savings account interest rates on Canstar’s database
If you’re looking for a competitively high ongoing rate for your savings, then you might be interested in the top base interest rates on our database.
The base interest rate (also known as the standard variable rate) is the ongoing rate you’ll be paid on your savings after any introductory bonus period ends, or if you don’t meet certain conditions for earning bonus interest (such as depositing a certain amount into your account each month).
To help entice new customers, some institutions often offer bonus introductory interest rates. These higher ‘honeymoon rates’ generally have an expiry date, typically lasting only a few months before reverting to a lower base rate.
At the time of writing, the best interest rate listed on Canstar’s database for a savings account is 5.75%, but that’s just a four-month introductory rate.
So let’s take a close look at some of the interest rates available on savings accounts, including the base rates, introductory offers and bonus savers.
The comparison table below is based on savings accounts on Canstar’s database, with rates based on a deposit of $10,000. It includes accounts with an introductory promotional rate available for a limited time, but excludes accounts with bonus conditions to earn the total rate.
Highest promotional savings account rates
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Provider | Account | Base Rate |
Promo Rate |
Total Rate |
Promo Period |
---|---|---|---|---|---|
Rabobank | High Interest Savings Account |
4.40% | 1.35% | 5.75% | 4 months |
Bank of China | Online Saver | 2.30% | 3.20% | 5.50% | 3 months |
Macquarie Bank | Savings Account | 4.75% | 0.60% | 5.35% | 4 months |
Easy Street Fin Services |
Easy Savings Online Account |
2.00% | 3.25% | 5.25% | 6 months |
BCU Bank | Bonus Saver | 1.00% | 4.20% | 5.20% | 4 months |
Source: www.canstar.com.au – 04/03/2024. Based on savings accounts on Canstar’s database, with rates based on a deposit of $10,000. Excludes accounts with bonus conditions to earn the total rate, but includes accounts with an introductory promotional rate available for a limited time. The top 5 selected and table sorted in descending order by total rate, followed by base rate.
Canstar may earn a fee for referrals. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD.
The comparison table below is based on savings accounts on Canstar’s database, with rates based on a deposit of $10,000. Excludes accounts with bonus conditions to earn the total rate and accounts with an introductory promotional rate.
Highest base savings account rates
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Provider | Account | Interest Rate |
---|---|---|
Australian Unity | Freedom Saver | 5.20% |
ANZ | ANZ Save Account (ANZ Plus*) |
4.90% |
BOQ | Simple Saver | 4.85% |
Macquarie Bank | Savings Account | 4.75% |
Unity Bank | MoneyMAX Account |
4.75% |
Source: www.canstar.com.au – 04/03/2024. Based on savings accounts on Canstar’s database, with rates based on a deposit of $10,000. Top 5 selected and table sorted in descending order by total rate, followed by base rate.
Canstar may earn a fee for referrals. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD.
*ANZ Plus Save Account Requires the ANZ plus app.
Highest savings interest rates on Canstar’s database, including those with some strings attached
Outside of bonus introductory interest rates, which often only last for a limited period, some institutions may also offer bonus conditional rates. This is where you need to meet certain conditions to receive the bonus interest each month.
For example, you may need to deposit a certain amount of money into your account each month, make no withdrawals during the month, or have a linked transaction account and make a specific number of card purchases each month.
Be aware that for some of these accounts, if you fail to meet the bonus interest conditions, you’ll receive little or no base interest. Check with the provider to confirm what conditions may apply.
The comparison table below is based on savings accounts with a conditional bonus rate on Canstar’s database, with rates based on a deposit of $10,000.
Highest bonus saving account rates
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Source: www.canstar.com.au – 04/03/2024. Based on bonus savings accounts on Canstar’s database, with rates based on a deposit of $10,000. Top 5 selected and table sorted in descending order by total rate, followed by base rate, followed by alphabetically by provider.
Canstar may earn a fee for referrals. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD. Different bonus conditions may apply to those under 25 years of age, refer to the provider for more information.
You can compare a wider range of savings accounts using Canstar’s savings account comparison tables. Canstar researches and rates more than 200 savings accounts. Find out which ones received an Award in 2023.
If you’re looking for other ways to boost your savings, check out our list of 70 tips to save money and our guide to budgeting and savings apps.
Canstar’s CEO, Andrew Spicer, also shared ways he saves when times are tight.
Learn more: 9 ways I learned the hard way how to save when times were tight
What is a high interest savings account?
In Australia, financial institutions such as banks and deposit-taking institutions (DPIs) generally offer a transaction account or savings account, and often a combination of the two.
Savings accounts are designed to earn you interest while limiting withdrawals, and, unlike a transaction account, usually don’t allow for cash withdrawals or direct spending through the account.
Here are the main differences between the savings accounts and transaction accounts:
- Higher interest rates: One of the main features of a savings account is the ability to earn interest, which is typically not present in a transaction account.
- Variable interest rates: Another aspect to a savings account is the variable interest rates, which can go up or down depending on the current market. This is unlike a term deposit, which locks in a certain interest rate for a set period of time.
- Compound interest: A common feature to high interest savings accounts, compound interest allows you to earn interest on your interest and is calculated as a percentage of the balance in your savings account.
- No account fees: The majority of savings accounts have no associated ongoing account fees, but often require a linking transaction account, which might have an account fee. You may also be charged a fee for certain transactions or if you require over-the-counter services or ATM access.
- Accessibility: Although not as accessible as a transaction account, you can technically transfer money out of your savings account at any time. This means if you suddenly require cash immediately, you’re able to access your savings. Just be mindful you may lose out on any conditional interest linked to the account for that month.
High interest savings accounts also tend to have terms and conditions that need to be met for the account to accrue higher interest than a standard savings account.
How do high interest savings accounts work?
High interest savings accounts often come with certain terms and conditions, such as limited withdrawals and a set amount deposited into the account each month, in order for your savings to accrue the higher interest rate.
These terms and conditions are often put in place to encourage you to regularly deposit into your savings account and withdraw less, which typically results in more interest being earned.
Another common feature to a high interest savings account is the opportunity to earn compound interest. Compound interest basically allows you to earn interest on your interest and is calculated as a percentage of the balance in your savings account.
In other words, you’re able to earn interest on whatever the current balance is in your savings account, even if part of that balance comes from the interest previously paid by the institution.
To give you a better picture, here’s an example of the kind of interest you could potentially earn on a savings account with compound interest.
The table below shows the accumulated interest earned for a $10,000 deposit into a savings account with compound interest at 1% per annum that’s paid monthly.
Compound interest over time on a $10,000 deposit
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Years | Balance | Interest earned |
---|---|---|
1 | $10,463 | $463 |
2 | $10,946 | $946 |
5 | $12,537 | $2,537 |
10 | $15,717 | $5,717 |
25 | $30,968 | $20,968 |
Source: www.canstar.com.au – 10/11/2023. Based on top 6 bonus savings accounts by highest rate on Canstar’s database, available for a deposit amount of $10,000. Age-restricted accounts are excluded. Interest calculated based on a $10,000 starting balance, interest rate of 4.53% – interest calculated daily and paid monthly.
What are the benefits of a high interest savings account?
The obvious main benefit of a high interest savings account is the high interest you’ll earn, and it’s one of the easiest and least risky ways to grow any money you may have stored away.
On top of that, it’s also flexible, so you’re able to deposit or withdraw your savings at any time.
To maintain your high interest savings, you could also automate your savings by setting up a recurring payment transfer between your transaction and savings accounts.
Unlike a term deposit, the flexibility of a high interest savings account may mean it’s easier to budget and manage emergency funds while still being able to accrue interest from your savings.
But keep in mind, some savings accounts only have high bonus interest rates, so if you do end up withdrawing from your savings, it may mean you lose out on the high interest earnings for that month, depending on your account’s terms and conditions.
Even so, you can always try to meet the requirements the next month.
Learn more: How to save money — 70 tips to cut living costs
Cover image source: Otello-stpdc/Shutterstock.com
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This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.
- Highest ongoing savings account interest rates on Canstar’s database
- Highest promotional savings account rates
- Highest base savings account rates
- Highest savings interest rates on Canstar’s database, including those with some strings attached
- Highest bonus saving account rates
- What is a high interest savings account?
- How do high interest savings accounts work?
- What are the benefits of a high interest savings account?
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