Savings and Transactions Trends: What Makes a 5-Star Account?

Canstar looks at the savings and transaction accounts that are recipients of this year’s 5-Star Ratings to identify what makes up a good value account.

Despite savings account rates being generally lower now than they were in previous years due to record low interest rates, there is still value to be found by shopping around.To help consumers identify the best accounts to maximise their saving potential, Canstar Research compared 295 unique savings accounts, and using Canstar’s unique rating methodology, assessed them on both their relative price and features.

The result was a shortlist of 5-Star rated products that we perceive to be among the top 10% of products that offer outstanding value to consumers across a variety of relevant consumer profiles.

Look at the table below for a quick view of the current Regular Saver accounts, sorted by Star Rating (highest to lowest) and with links to provider’s websites. Please note this table has been formulated based on a savings amount of $20,000 in New South Wales.


So what are the main features of a 5-Star savings account?

What makes a 5-Star Flexible Saver account?

These are the accounts best suited to people who want flexibility with their savings without set requirements, such as needing to make regular deposits, or restrictions on how (and when) they can access their money.

If a person had a balance of $25,000 in a Flexible Saver account, the average base interest rate for all accounts assessed in this profile was 1.34%, which would earn consumers approximately $335 of interest over the year. The average base rate for our 5-Star recipients was 1.93%, which equates to $482 interest over the same period. In this instance, switching from an average-performing Flexible Saver account to a 5-Star recipient could earn you nearly $150 more over the year.

Four of the accounts that received a 5-Star rating offer a conditional bonus on top of their base rate to customers who have a linked transaction account with the same institution and meet some non-savings related conditions, such as having your salary deposited into the account each month, which could lead to even more interest without the need to adjust your savings behaviour.

What makes a 5-Star Regular Saver account?

Regular Saver accounts encourage positive savings habits and reward people who actively save.  These accounts tend to offer higher interest rates than Flexible Saver accounts but may have stricter conditions to ensure the maximum return on your savings can be achieved. There are some competitive rates available for consumers who are proactive in saving, even in today’s extremely low-rate environment.

The average total interest rate across the industry (the base rate + conditional bonus rate) was 1.85%, which for an account balance of $25,000 equates to $462 over the year. The average rate from our 5-Star recipients was 2.72%, equating to $680 earned over the same period. This means someone switching from an average-performing account to a 5-Star recipient could earn an additional $222 over a year.

Transaction accounts

Most people require a transaction account to manage their finances, though these tend to earn less interest than savings accounts. When assessing transaction accounts, Canstar Research determined consumers should not be paying fees for their bank accounts, as 70 of the 127 transaction accounts researched do not charge account-keeping fees, while an additional 28 waive the monthly fee when a deposit condition is met.

Some institutions offer incentives to pre-existing customers, students and pensioners to help avoid fees, but there are other ways you can sidestep charges with your transaction account.

 Not all savings accounts are made equal, and switching accounts could mean more money in your pocket. Have a look at our comparison tables to compare savings accounts:

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