Savings .com.au

Frequently Asked Questions

There are actually different kinds of ‘bank accounts’ you can have. The savings account is just one of them – another is a transaction account, which is usually linked to the savings account.

While savings accounts let you save money and accrue interest, transaction accounts allow you to spend and transfer money. When opening a transaction account, you’ll be sent a bank debit card, letting you ‘tap n pay’, withdraw money from ATMs, make online purchases, and so on.

Transaction accounts earn very little interest (if any at all) so it’s generally best to keep as much of your spare cash as possible in the savings account and only what you need to cover your daily expenses in your transaction account.

To find out if your savings account is paying compound interest, you will want to take a look at when the interest is paid and where. Interest that is paid monthly into your savings account will be compounded. If your savings account requires a minimum monthly deposit, any interest you earn generally won’t count towards that as the minimum monthly deposit requirements must be met with other funds.

The banks typically calculate interest on the daily closing balance. This is the equation for savings accounts: Daily closing balance x interest rate (as a percentage) / 365.

Compound interest is interest paid on the initial principal (the original sum of money you’ve invested, or the amount borrowed or still owing on a loan), as well as the accumulated interest on money you have invested or borrowed.

There are essentially three different components that work together to calculate your interest in a savings account: (1) the principal: the amount you have in savings, which increases with regular deposits, (2) the interest rate: savings accounts use compounding interest, which means both the principal and additional interest earn interest, and (3) time: how often interest is calculated and paid can have an impact on interest.

joint savings account is an account held by two or more people. They’re commonly held by couples but not exclusively so: friends, family, housemates and business partners are all examples of people who can open a joint savings account.

Savings Accounts Guides

Should you open a joint savings account?

Quick Guide to Macquarie Bank Savings Accounts

Can I withdraw my super early to pay off debt?

How much does the average Australian save?

What is withholding tax on a savings account?

The best budgeting and savings apps for Australians in 2025

Editorial Promise

Savings.com.au follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts who ensure everything we publish is objective, accurate and trustworthy.

Editor at Savings.com.au

Dominic Beattie is the Editor of Savings.com.au, Group Editor for the wider InfoChoice Group, and host of The Savings Tip Jar podcast alongside Harrison Astbury. Previously working as a finance journalist, Dominic has been publishing articles on finance, business and economics since 2015, and helped launch Savings.com.au as finance news and comparison site in 2018.