Savings accounts

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 features:

  • The interest rate, how regularly you receive the interest and how long any honeymoon or introductory interest rate applies
  • 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 comparison websites.

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 website.

How savings accounts help you save

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 the account.

Remember, online savings accounts may give you less access to your money than ordinary  transaction accounts.

Compound interest

Compound interest is like double chocolate topping for your savings. It helps you to save even more. Find out how compound interest works.

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 money.

Paying tax on your savings

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 webpage.

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.

Related links

Last updated: 15 Nov 2018