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Saving money is a good habit to have, but it is not one that is easy to get. Saving your money requires discipline, determination and solid knowledge of what the financial market has to offer.
There are many financial institutions in Australia offering many types of savings accounts with different features. The number of the available savings accounts types, though, can seem overwhelming to a lot of people who can find themselves confused by the huge amount of choices.
Choosing the best savings account in Australia that will suit your needs perfectly is not the easiest of tasks! There are a lot of things to consider and many questions to answer before settling on a single one.
The first thing to know before even trying to choose the very best savings account in Australia that will meet your needs perfectly, is that savings accounts are not one-size-fits-all.
There are multiple different savings accounts in Australia, so the choice can seem overwhelming, especially for people that do not have much experience in the banking system. Therefore, it is crucial to compare savings accounts, find out their advantages and disadvantages and base the decision on that. In the end of the day, it is not just a high interest savings account that is important, there are a lot of other things to be kept in mind; things such as numerous account keeping fees and possible fee rebates, linked accounts, accessibility of bank accounts, savings features etc. Hence, a thorough comparison of the savings accounts is more than important.
As we have already established, there are multiple types of savings accounts in Australia. They vary in interest rates, additional features, account keeping fees, accessibility of bank accounts etc. Different as they are, they fit a wide variety of needs. One thing they do have in common is that, in Australia, we are lucky enough to have a safe guard guaranteeing deposits held in banks.
While some people need a high interest savings account with multiple additional features, others might only need something very basic. For the latter, basic savings accounts are available in multiple financial institutions in Australia.
Basic Bank Accounts are offered by most Australian banks.. The basic bank account is a transaction account that has fee-free features and is intended for customers on a lower income. Eligible customers are provided with an account where they can receive their government benefit payments into and access free banking transactions. This account includes no account keeping fees, no minimum deposit amounts, no overdrawn fees and free monthly statements. With this basic account, users can expect to get a debit card at no extra cost, too.
Transaction accounts are among the most popular bank accounts in Australia. A transaction account is an everyday account used to manage your finances and day-to-day banking needs.
Transaction accounts are usually used for the money that is most likely going to be used in the near future. With a transaction account, you can deposit your income, and withdraw money immediately, at any time. The money is at call and withdrawal can be done in a number of ways: debit card EFTPOS, ATMs, direct debit, Bpay, branch access, internet access, access via phone, and cheques.
Transaction accounts do not target specific groups of users. Pretty much everyone can find this bank account useful! It is by far the most versatile one, though it does have a downside: the fees.
Possible monthly account-keeping fees, branch cash deposit or withdrawal fees, EFTPOS transaction fees, and ATM and cheque withdrawal fees; it must all be taken into consideration!
While the transaction account might be good for everyday transactions and basic banking needs, the account is not a fitting one for those looking for a high interest savings account.
If what you are looking for is a high interest savings account in Australia, then this next account would be a likely choice!
A savings account is fitting for those having a specific saving purpose in mind; a purpose such as buy a car, paying a home deposit or paying for a holiday.
Savings accounts in Australia usually have higher interest rates than transaction accounts. The money are available at call and can be withdrawn at any time (though, early withdrawal may incur some sort of a penalty!)
The interest rate is calculated based on your account balance. Interest is usually calculated daily and paid monthly!
Some types of saving accounts can also be used for day-to-day banking needs. Savings accounts nowadays are often offered online, too. Financial institutions, seeing that people are embracing online banking more with each passing day, are starting to offer online only savings accounts that offer a great rate of interest due to the cost-effectiveness.
Financial institutions even offer children’s savings accounts. These saving accounts differ from the regular ones in terms of interest rates and card availability and are usually seen as means of creating healthy savings habits for children at young age.
A Term deposit account is another savings account in Australia for those willing to deposit money they don’t require for a set period of time in return for a higher rate of interest.
With a term deposit account, customers are expected to ‘lock in’ their finances for a fixed period such as 90 days, 180 days or even longer. This basically means that customers are expected not to use their money in the agreed period in return for a higher rate of interest.
What is great about this type of saving account is that the interest, due to it being fixed, is not affected by changes in market interest rates. This makes for a rather predictable saving experience: the user knows up front how much they will gain if they do not withdraw the money before the ‘deadline’.
Most of the time, the more time the money are ‘unavailable’ for withdrawal, the higher the interest rate will be. Hence, a 6 month term deposit may mean higher interest rate than a 3 -month term deposit. Upon agreement, the interest rate can be paid monthly or at the end of the agreed term.
Financial institutions offering this savings account usually have a requirement of minimum deposit (sometimes as high as $10,000!) and the funds in the account are generally not available until the agreed end of the term of the deposit. These are features worth investigating when comparing high interest savings accounts in Australia.
The Internet-based saving account is a reasonable choice for those looking for a straightforward high interest savings account in Australia with low or no fees!
This high interest savings account has multiple advantages: money is at call, so clients can access it immediately via an online banking platform and interest rates are higher than other accounts in the market. Plus, it is all very convenient and accessible since only a device with internet access is needed.
While online transactions are made immediately, a delay might be possible if the money is being transferred to a regular, transaction account held with a different bank. This is something keep in mind! Many internet-based savings accounts are ‘online-only’ meaning that clients cannot make immediate ATM withdrawals directly from the account.
Similar to some of the other, above-mentioned accounts, a minimum balance is usually required in order to start earning interest here, too. Again, it is worth studying the features of different internet based savings accounts, as not all are equal.
A Cash management account is savings account that offers a higher rate of interest than standard savings accounts, but offers easier access to funds for investment purposes. This is why they are sometimes considered an ‘investment product’ by some financial institutions.
Cash management accounts usually require a minimum ongoing balance, pay a higher interest rate and can be linked to other accounts such as online trading accounts. .
With some cash management accounts, those with higher account balances will get higher interest rates, meaning that the more money you have in your account, the greater the interest payable will be.
While cash management accounts generally have little or no account keeping fees, there might sometimes be fees associated with transactions that you will need to consider, which might limit how many transactions you can do per month.
With the number of products and volume of information available, choosing the most suitable savings account in Australia, is always easier said than done. The fact is, the choices are numerous and overwhelming, and that can lead to some terrible confusion! Especially for people that do not have much experience in the banking or its savings products.
In order to make the right decision, a thorough understanding of the accounts’ features and a detailed comparison is always needed. Making an informed decision is the only way you can find the very best savings account to suit your needs and save you money. So, read all those ‘terms and conditions’ and get informed! The more you know, the better your decision will turn out to be!
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