Thinking of saving your money and want to earn interest from it? Then, you should consider opening a savings account in Australia – but not just any account as we’ll explain.
Savings accounts come with different rates and terms, so take the time to understand what they are. There are high-interest rate savings accounts, but some of them have strict requirements, such as minimum deposits and no withdrawals.
Some banks usually offer honeymoon periods for high-interest rates. For example, you can get a rate of 3 percent, but it only lasts for 3 months; the introductory period.
How Much Money Should You Have in Your Savings?
Most financial experts usually recommend having savings worth six months of your expenses. But that’s not a working rule for everyone. What you need is a budget.
Every person has a unique financial situation, and setting a clear budget is the first step to knowing how much you can comfortably save.
Or, you can work with the popular 50/30/20 rule. With this rule, your fixed costs take up 50 percent of your monthly budget. 30 percent is a flexible budget; think of it as a wiggle room for those fixed costs that can increase during any month, such as food.
Then 20 percent should go towards your financial goals. You can put some in your savings account and save some for your emergency fund.
The bottom line is that it always starts with a budget. Here are some popular savings accounts to consider:
With Usaver account from UBank, the interest rate starts from 1.04 percent per year. Keep in mind this is a variable rate, and the account has no fees whatsoever. The interest is calculated daily, and you can transfer your funds to any eligible bank account in Australia.
There is no minimum balance that’s required to open and maintain your USaver account. The maximum investment for the account is $5,000,000, and you can manage your account online.
ING Savings Maximiser
Another great high variable interest rate account is the Savings Maximiser by ING. The account has no feels, and you can draw any amount at any time without penalties. You can get a rate of up to 1.95% p.a., but the standard variable rate is 0.25% p.a.
You can get the 1.95 percent rate as long as your balance is up to $100,000, and you have the Orange Everyday card.
ANZ Progress Saver
If you’re serious about meeting your saving goal, then the Progress Saver account by ANZ makes a great pick.
This account rewards you for saving regularly, and you can earn an interest rate of 1.60% p.a. when you deposit $10 or more every month without withdrawals. But the base rate is 0.01% p.a., and you can only qualify for the bonus rate, 1.59% p.a., with the $10 or more deposit every month.
With this account, there are transaction fees: $2.50 per transaction for staff-assisted transactions and $1.00 per transaction for electronic transactions. There is no monthly account service fee, though.
You can set automated monthly transfers, allowing you to save even more.
NAB Savings Account
NAB savings accounts come in two options: NAB iSaver and NAB Reward Saver.
With iSaver, you get a standard variable rate of 0.11% p.a. And a fixed bonus margin of 1.75 % p.a., giving you an introductory rate of 1.86% p.a. The fixed bonus only applies to the first four months on your first iSaver account for balances up to $20 million.
There are no monthly account keeping fees and no minimum deposits. The bank calculates interests daily and pays them every month.
You can also go for NAB Reward Saver, which offers a standard variable rate of 0.11% p.a. and a variable bonus rate of 1.50% p.a., giving you an interest rate of 1.61% p.a. With this account, there’s no introductory period. You can earn the 1.50-percent bonus every month as long as you make at least one deposit every month before the second last banking day of that particular month.
You still earn the base rate even when you make withdrawals. Interest is also calculated daily and paid out monthly.
Saving money can go a long way in taking control of your financial future. First, it starts with determining the amount you can comfortably save every month without getting into hardship. You’ll then have to find the right savings account in Australia to help you reach your savings goal.
Be sure to take the time to compare different accounts to understand their features, fees, and rates before picking one.