What Is A Savings Account?

29 November 2016

We investigate what savings accounts are, and the different types you can choose from.

What is a savings account?

A savings account is – as the name suggests – a bank account into which you deposit money to accrue interest and build your savings.

Savings accounts are popular and useful for just about anyone who’s trying 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 to guarantee receiving some kind of return on their money.

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

Savings account types

When it comes to our Star Ratings and Awards, CANSTAR assesses a number of different types of savings accounts:

What is the deposit guarantee?

During the all-consuming GFC, the federal government introduced the Australian Government Deposit Guarantee Scheme. The scheme promoted national financial stability by ensuring that financial institutions had enough funds to continue to run, preventing liquidation. The Financial Claims Scheme remains in place post-GFC as a government guarantee or security on bank deposit (including savings accounts) of up to $250,000 per customer per institution.

The scheme applies to authorised deposit taking institutions (ADIs), which are approved financial institutions such as banks, building societies, and credit unions. The scheme applies to branches of foreign owned banks here in Australia, but does not apply to any deposits you might have sitting in overseas branches of Australian banks.

Compare savings accounts with CANSTAR

Before making any personal financial decision, it is important to do your research. Always ensure you read the Product Disclosure Statement (PDS) and the terms and conditions before making a purchase decision. Fortunately for you, we have compared over 450+ high interest savings accounts in one easy-to-use comparison table in order to find one that suits your needs. Compare savings accounts today!

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