Deposits in savings accounts are being eroded by inflation as banks continue to slash interest rates - but there are still some savings accounts on the market with good rates. A key component of savings account interest is the base rate.

This article will explain what a base rate is, how it’s different from other savings account rates, and why it’s important to keep your savings interest rate above inflation, which is getting harder to do.

Compare savings accounts with the highest base rate

The table below displays a selection of some of the highest base rates on savings accounts.

Provider

010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • Deposit at least $1,000 + each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month

Savings Maximiser (<$100k)

  • Deposit at least $1,000 + each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
No monthly fees
  • Download the App to open your account
  • Get better visibility of your spending within App!
  • Deposit $200 per month to activate bonus interest
No monthly fees

Save Account

  • Download the App to open your account
  • Get better visibility of your spending within App!
  • Deposit $200 per month to activate bonus interest
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details

Boost Saver

    Important Information and Comparison Rate Warning

    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of December 8, 2023. View disclaimer.

    What is a base interest rate?

    A base interest rate is the default interest rate that all account holders will earn on a particular savings account.

    According to Savings.com.au’s research, the highest base rate on the market is currently 3.50% p.a. for a children’s savings account, which tend to have higher interest rates than adult savings accounts. The highest base rate for an adult savings account is currently 1.20% p.a, while the average base interest rate for most savings accounts is generally between the 0.50% to 0.80% mark. If you’re a customer of the big four it’s even worse, as the average base rate on savings accounts across the big four banks is just 0.05% p.a at the time of writing.

    If that sounds pitifully low it’s because it is. Interest rates on savings accounts have been plunging over the last couple of years thanks to multiple cash rate cuts by the Reserve Bank. Since 2019, the cash rate has been cut six times. As of March 2021, the cash rate is just 0.10%, while the current rate of inflation is 0.90%.

    This means that if the total interest rate on your savings account is lower than 0.90% p.a, your money is basically going backwards. Savings that aren’t growing at or above the rate of inflation results in your money essentially decreasing in value over time.

    See also: How inflation affects your term deposit and savings account returns.

    How are base interest rates different from bonus interest rates?

    A bonus interest rate is usually offered on top of the base rate, either as an introductory rate (also known as a honeymoon rate) or as a conditional rate, which you can only earn by meeting certain conditions like:

    • Depositing $X amount of money into your savings account every month

    • Making no or limited withdrawals every month

    • Making a certain number of transactions every month using the linked transaction account

    • Having a linked transaction account with a certain amount of money deposited into it every month

    Sometimes you may have to meet a combination of these requirements to earn the bonus rate.

    The table below displays a selection of savings accounts with some of the highest bonus rates on the market (age limits may apply).

    Provider

    4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details
    • Bonus rate for the first 4 months from account opening
    • No account keeping fees
    • No minimum balance

    High Interest Savings Account (< $250k)

    • Bonus rate for the first 4 months from account opening
    • No account keeping fees
    • No minimum balance
    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details
    • Deposit at least $1,000 + each month from an external source
    • Make 5 or more eligible transactions
    • Grow your savings balance each month

    Savings Maximiser (<$100k)

    • Deposit at least $1,000 + each month from an external source
    • Make 5 or more eligible transactions
    • Grow your savings balance each month
    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details
    • No account fees
    • Total ongoing variable rate of up to 5.20% pa by depositing $1,000 in the previous month
    • Easy access to your money

    Saver Account (<$250k)

    • No account fees
    • Total ongoing variable rate of up to 5.20% pa by depositing $1,000 in the previous month
    • Easy access to your money
    4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details
    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    • A great base interest rate of 4.75%

    Savings Account (Amounts < $250k)

    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    • A great base interest rate of 4.75%
    05001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details
    • Maximum Age - 24
    • $0 monthly account fee
    • Earn bonus interest

    Goal Saver

    • Maximum Age - 24
    • $0 monthly account fee
    • Earn bonus interest
    02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details
    No monthly fees
    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    No monthly fees

    Save Account

    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    020000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details

    HomeME Savings Account ($0 - $100,000)

      010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
      More details

      Boost Saver

        01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
        More details

        Bonus Saver Account (Amounts < $100k)

          3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
          More details

          Everyday Savings Account

            5000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
            More details

            NetBank Saver

              3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
              More details

              Maxi Saver

                00.010$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                More details

                Life

                  3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                  More details

                  Maxi Saver

                    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                    More details

                    Smart Saver Account ( < $250k)

                      3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                      More details

                      Maxi Saver

                        3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                        More details

                        Online Savings Account

                          03000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                          More details

                          Bonus Savings Account

                            4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                            More details

                            iSaver

                              4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                              More details

                              Bonus Saver ($0+)

                                Important Information and Comparison Rate Warning

                                All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of December 8, 2023. View disclaimer.

                                Savings.com.au’s two cents

                                When choosing a savings account, looking for a high base rate is definitely important but it’s not the only thing to look out for. You also want to make sure the savings account doesn’t have any monthly account keeping fees as these will eat into your savings. There are so many savings accounts on the market that don’t have any account keeping fees, so it wouldn’t make sense to choose an account that does.

                                You should also consider what features you want in a savings account, such as the ability to link multiple sub savings accounts for different savings goals.

                                Photo by Vanessa Lee on Unsplash