Growing your savings faster
Here is some information on how savings accounts differ from
other accounts and how to choose the right one for you.
How to find a savings account that's
right for you
To decide which savings account is best for you, compare these
- The interest rate, how regularly you receive the interest and
how long any honeymoon or introductory interest
- Minimum and maximum account balances
- Account-keeping fees
- What interest you lose if you withdraw money and what rewards
you get if you deposit money regularly
- Whether a linked account is required.
If you're comparing features online see our guidance on using
Authorised Deposit-taking Institutions
You should also check whether the account is offered by an
Authorised Deposit-taking Institution (ADI). ADIs are regulated by
the Australian Prudential Regulation Authority (APRA) so your
money is safer with them. Check whether the institution offering
the account is on APRA's list of
Authorised Deposit-taking Institutions.
If you're a low income earner you might qualify for a
savings program, offered by some charitable organisations. For
more information see
other programs for low earners.
Find a basic bank account
Some financial institutions offer basic bank accounts with:
- No account-keeping fees
- Free monthly statements
- No minimum deposit amounts
- No overdrawn fees.
You can find which financial institutions offer these basic bank
accounts on the Australian Bankers' Association's Affordable Banking
How savings accounts help you
Savings accounts are specifically designed to help your
savings grow faster. They offer a higher interest rate than basic transaction
accounts. Some also make it harder for you to access your money so
you are not as tempted to dip in. With more money saved, you will
be able to take that dream holiday or save the deposit for your
first home sooner.
Online savings accounts
Most people choose an online savings account, which is
convenient because you can easily transfer money from your
transaction account to take advantage of the higher interest rate.
These accounts encourage you to leave your money alone so it can
grow through compound interest. Some accounts even
reward you with higher interest if you make regular deposits into
Remember, online savings accounts may give you less access
to your money than ordinary transaction accounts.
Compound interest is like double chocolate topping for your
savings. It helps you to save even more. Find out how compound
Savings accounts for kids
There are savings accounts specifically for children that reward
them for making regular deposits. However, it is important to
understand how income earned in these accounts is treated for tax
purposes. Check with the Australian Taxation Office
(ATO) to see how these accounts are taxed. Setting up one
of these accounts with your child gives you the chance to talk to
them about the value of saving. For more information see teaching your kids about
Paying tax on your
Remember that any interest you receive from your savings account
must be declared in your tax return. For more information, see the
ATO's investment income
If you are serious about trying to save, open a
savings account. You can take advantage of their higher interest
rates to help reach your savings goals sooner.
Last updated: 15 Feb 2018