AMP to up savings account rate to 5.40% p.a

The highest variable rate on the AMP Saver account applies to balances up to $250,000.

The standard variable rate, earned by all customers, is 1.20% p.a, while the Bonus Interest Rate will be 4.20% p.a from 1 February (currently 4.00% p.a)

To earn the bonus rate in a given month, customers need to deposit at least $1,000 in the preceding month.

As of December '23, there are still several savings account products with a rate higher than 5.40% p.a, although some of these alternatives, including ING and ME Bank, cap deposits lower than $250,000.

The ING Savings maximiser currently has a conditional rate of 5.50% p.a, but a maximum deposit of $100,000, while savers can earn 5.55% p.a with the ME Bank HomeME account, also up to $100,000.

The MOVE Bank growth saver has the highest ongoing rate available in Australia at the moment (per Savings.com.au's market research) at 5.70% p.a, on balances up to $25,000.

UniBank, Teachers Mutual Bank and Firefighters Mutual Bank are among the providers that currently offer an ongoing rate of 5.50% p.a with no limit on deposit sizes.

All of these products have conditions customers need to fulfill to earn these rates, which has recently drawn criticism from the ACCC.

The regulator found recently that in the first half of 2023, 71% of customers with savings accounts that had bonus rates did not earn the maximum return.

ACCC Chair Gina Cass-Gottlieb is recommending the requirement for banks to alert customers if they are about to lose their entitlements in a given month.

"While high headline interest rates may seem attractive to customers, they can come attached with conditions that are hard for customers to meet and keep track of," she said.

However, Group Executive of AMP Bank Sean O'Malley said in 2022 that the intention of products like the AMP Saver is to reward customers for positive spending habits.

"This product is a great option for customers who are looking for a simple, market-competitive product to help them achieve their long-term savings goals," he said.

Earlier this month, Australian Unity customers were upset when the bank initially announced an unconditional rate of 5.50% p.a, which attracted "unprecedented demand", before quickly closing applications and announcing the rate would drop to 5.20% p.a on 2 January.

February rate cut off the table

For a brief window last week, the ASX RBA rate tracker suggested markets saw a small possibility of the cash rate target being cut in February.

After the RBA minutes were released on 19 December though, the indicator is back to comparing the probability of a hold or a further hike.

As of 20 December, market expectations were that the chances of the cash rate remaining at 4.35% were 92%, but if there are to be cuts, it looks likely they will come later in the year.

For savers, this means these high returns on savings accounts will probably be sticking around for at least another few months.

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Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Photo by Jelleke Vanooteghem on Unsplash