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What's new in March: The hottest deals

What's the real value of a high interest rate on your savings account? It all depends on your saving habits and goals. RateCity has crunched the numbers and found that the difference between a high-rate and low-rate savings account could be the equivalent of over 300 coffees over a year, for example.

If you have a specific savings goal in mind, you can use a savings calculator to estimate how long it may take to reach your goal, and how much the interest you earn could help you reach that balance.

Remember that some savings accounts come with specific terms and conditions that must be met monthly to secure the highest rate - so always make sure you know what they are, and that you can achieve them, before locking anything in.

Compare some of the top savings account interest rates in March 2024 on the RateCity database: 



Max balance for rate

Monthly conditions for max rate

ME Bank HomeME



Deposit $2k+ into linked bank account and grow savings balance.

ING Savings Maximiser



Deposit $1k+ and make 5+ transactions in linked bank acct, plus grow savings balance.

MOVE Bank Growth Saver



Deposit $200 into savings account each month and make no withdrawals.

AMP Saver Account



Deposit at least $1,000 each month

Virgin Money Boost Saver



Deposit $1k+ into linked account, make 5+ trans. / mth, provide 32 days’ notice to withdraw cash.

Source: Excludes kids and young adults accounts. 

Updated by Mark Bristow on 5 March 2024. 

What is a high-interest savings account?

A high interest savings account is a type of savings account offered by banks and financial institutions that typically provides a higher interest rate compared to traditional savings accounts. These accounts are designed to help savers grow their savings faster by earning a higher rate of interest on their deposited funds. 

Ideal for a wide array of savings objectives, from vacation funds to significant investments like a house deposit, high-interest savings accounts present a straightforward, low-risk strategy for growing your savings through interest accumulation. 

When seeking the right savings account, it's essential to not only focus on finding the highest interest rates but also to consider the broader picture, including the account's fees and the terms and conditions associated with it. 

A comprehensive savings account comparison can help optimise your savings. While the highest interest rates might initially seem the most attractive, they may not always be the best fit for your specific needs. 

Many savings accounts come with a unique set of rules—such as minimum monthly deposit requirements or limits on withdrawals—that could affect its suitability for your saving habits. Identifying an account that offers competitive interest rates and aligns with your savings habits and goals is key. 

Savings account calculator

Savings account calculator

See how fast you saving can grow with regular deposits.


Benefits of a high interest savings account

Opening a high-interest savings account may have several benefits, as elaborated below. 

A higher interest rate 

When it comes to your savings, a higher interest rate can help your money grow faster by paying you highly competitive rates compared to transaction accounts that don't pay much (or any) interest. 

An incentive to save 

Some banks require you to deposit money regularly in your account and maintain a minimum balance to earn a higher interest rate. This could act as an incentive for some individuals to save money. But it's also important to check whether you can afford to have the required minimum deposit amount in savings to earn the bonus interest rate. 

Alternatively, you can also find savings accounts with no monthly minimum deposit. While you may not earn a bonus interest rate with such an account, it could encourage you to build a savings habit.

No account keeping fee

Some high-interest savings accounts don't charge any account keeping fees. However, if you need access to ATM withdrawals with your account, you might have to pay a fee. Alternatively, you may consider linking up your savings account with an everyday bank account to access your savings, but there might be account keeping charges applicable on the transaction account. 

Fast-tracking your savings goals 

If you've set yourself a financial goal, a high-interest savings account can offer the ideal path to realise it. Depending on the account type you choose and the kind of restrictions you're comfortable with, you could even qualify for a bonus interest rate and speed up your journey. 

Ease of opening and closing accounts 

A term deposit may get you better rates than a high-interest savings account, but you won't have any access to your money for the duration of the deposit. The lack of a lock-in period on high-interest savings accounts allows you to move your money into a more lucrative investment whenever you prefer. 

Security of funds 

If you're worried about the safety of your funds, you could consider opening an account with a bank covered under the government guarantee scheme. Your savings with such banks are insured by the Australian government for a maximum of $250,000 per person, per institution. 

How is interest calculated on a savings account?

High-interest savings accounts accelerate the growth of your savings by compounding the interest and adding that to the amounts you deposit. Compound interest is calculated as a percentage of the account balance and paid by the account provider, usually monthly or annually. 

As a result, interest earned on your savings in the past is also accounted for, not just the amounts deposited, so you can earn interest on interest. Regularly depositing even small sums of money into the account can translate into a significant increase in your savings

For example, suppose you opened a high-interest savings account in an Australian bank offering 2% interest, compounded monthly, with an initial deposit of $100. The account provider would include the interest earned on this sum in the first month when calculating the interest earned for the second month. Accordingly, even if you didn't deposit any amount in the second month, you'd earn more interest than you did in the first month. 

On the deposit of $100, you'd earn $2 in interest in one year, $4 by the end of the second year, etc. After five years, your account balance would total $111. However, if you deposited $10 every month in addition to the initial deposit, your account would have $741 in it at the end of five years. See the table below to understand in detail how compound interest works in these two cases: 

YearAmount deposited ($)Interest earned ($) Amount deposited ($10 per month, $)Interest earned ($)
11002100+120 = 2203
202.04120 9
Final Balance110.40-741-

What are the types of savings accounts with higher interest rates?

Different types of savings accounts with higher interest rates include accounts offering bonus interest rates for meeting specific conditions like regular deposits or maintaining a minimum balance. Some provide introductory or honeymoon rates for a limited period, typically offering a higher rate to new customers. 

Online savings accounts, which operate digitally, often offer competitive rates due to lower operational costs. Each type has unique requirements and benefits, tailored to various saving goals and habits. 

1. Introductory savings accounts 

These typically offer a higher rate, sometimes called a promotional rate, for the first few months after you open the account, after which you earn interest at the base rate. Consider checking the difference between the promotional and base rates before opening an account. 

2. Conditional savings accounts 

As the name suggests, these accounts require you to meet specified conditions such as maintaining a minimum balance, making regular deposits, making few or no withdrawals in a calendar month, and so on to earn a bonus or higher interest rate on your savings

3. Online savings accounts 

Online savings accounts are typically operated through the provider's Internet banking site or mobile banking app. Some purely digital providers may also offer high-interest online savings accounts with no fees, although the lack of a physical location limits customers' options for contacting their bank. 

4. Children's savings accounts 

Children's savings accounts can help teach your child basic financial literacy in a digital age. Kids can gain an understanding of the banking system and learn how to save money, especially when paired with educational savings apps. Compared to adult accounts, children's savings accounts generally have higher interest rates, but can come with higher fees. 


Both savings accounts and term deposits are protected under the Financial Claims Scheme. The federal government will guarantee up to $250,000 for each account holder at each licenced bank, building society or credit union incorporated in Australia. 

Making the most of high-interest savings accounts

With numerous accounts offering high interest rates, here are some practical tips to help you make an informed decision when choosing the best account for your savings goals

How can you find the best savings account interest rates? 

Comparing savings accounts across a variety of banks can increase your likelihood of identifying one with an attractive interest rate and features that meet your needs. Yet, it's essential to look further than just the rates themselves and take into account any specific conditions tied to securing the higher rate. 

Ensure you understand these terms to decide whether you can meet them consistently. Additionally, be mindful of any fees associated with the savings account to prevent them from diminishing your accrued interest. 

Factors to consider when choosing a good high interest savings account 

When comparing high interest savings accounts, there are several key factors to consider to ensure you choose the best account for your financial needs. 

Interest ratesIf you're looking to earn more interest over the short term, an account offering a promotional rate might work for you. However, if you want to grow your savings consistently over the long run, you may want to look for a conditional savings account with a suitable set of restrictions. 
Minimum balance requirementsSome high interest savings accounts may require a minimum balance to be maintained in order to qualify for the advertised interest rate. Be sure to assess whether the minimum balance aligns with your savings goals and financial situation. 
Fees and chargesThese days, many savings accounts don't charge any monthly account fee, especially online savings accounts. Make sure you check the account terms to see which fees are permanently waived and which may apply to some transactions. 
Accessibility and convenienceConsider the accessibility of the account, including online banking features, mobile app availability, and ATM access. For instance, online savings accounts can get you a higher interest rate and can be operated more conveniently, but you may not have direct access to bank officials at a branch if you need to resolve any account-related issues.
Account features and benefits

Some high interest savings accounts may offer additional features such as bonus interest promotions, linked transaction accounts, or rewards programs. Evaluate these extra benefits to see if they align with your savings strategy.

However, these features may be associated with some conditions. You may lose out on earning interest at a higher rate if you make too many withdrawals from a conditional savings account. You could divide your deposit between savings and transaction accounts if you anticipate withdrawing money often. 

How a variable cash rate can affect your savings

High-interest savings accounts often come with variable interest rates, which can change based on the market. Any change in the Reserve Bank of Australia's cash rate can influence the interest rate offered to you. If you prefer greater certainty regarding the growth of your savings, consider opening a high-interest term deposit account

Exploring other savings options

The main benefits of a savings account are simplicity and low risk. You're not investing anything, so your money can simply sit in the account and earn interest. It's also safer than hiding cash under your mattress, as it can't be easily stolen or damaged.

Another low-risk option is to park your savings in a term deposit. These are similar to savings accounts; however, once you've deposited your money, you can't easily withdraw the funds until the end of a fixed term. The interest rates are fixed in advance, so it's simpler to calculate the interest you'll earn over time. 

Difference between savings accounts and term deposits 

If you're seeking a relatively safe option to grow your money, savings accounts and term deposits are two popular choices. While the former provides flexibility, the latter offers certainty. For example, with a savings account, you can access your funds when needed, which could make it a handy option for short-term savings goals or as an emergency fund

The interest rates on savings accounts are variable, meaning they can fluctuate based on market conditions or changes in the Reserve Bank's cash rate. In contrast, term deposits offer a fixed interest rate over a predetermined period, ranging from a few months to up to five years. This fixed rate provides the certainty of knowing exactly how much interest you will earn by the deposit's maturity, making term deposits suitable for long-term financial planning where immediate access to the funds is not required. 

In general, term deposits can be a competitive option for anyone prone to dipping into their savings, as you can lock away your money to earn interest at a fixed rate, making slow and steady progress towards your savings goals. While it is possible to end your term deposit early to access your money if you need it, you'll likely need to provide plenty of advance notice (often at least a month), may miss out on interest income, and may also need to pay an early withdrawal fee. 

Choosing between a savings account and a term deposit depends on your financial goals and whether you need to access your money in the short term. Check our comparison tables for the latest comparisons and detailed analysis of both savings accounts and term deposits, including the most competitive rates and terms available. RateCity provides up-to-date information and tools to help you make an informed decision that best suits your savings strategy. 

How to open a savings account

Opening a savings account is straightforward and isn't likely to take up much of your time. Once you have found an account suitable for you, all you need to do is contact your lender via phone or visit a branch to begin the process. Some banks also let you open an account online by filling out an online application supported by copies of one or more of your primary documents.

If you're looking to open a new account or planning to move your savings to another bank, it might be worth comparing high-interest savings accounts from different providers to find a competitive interest rate. Here are a few points worth comparing in addition to the interest rates when searching for a suitable account to grow your savings: 

  • Some banks may offer high interest rates but require you to meet some tough conditions to earn that interest. For instance, you may be required to deposit a minimum amount each month to earn the high rate, and it's worth checking whether you can afford it or not. 
  • If you open an account with a high introductory rate, you'll only earn bonus interest for a short period, after which your interest rate will revert to a lower base rate. 
  • There are some banks that require you to have a transaction account with them to open a savings account. While savings accounts don't usually charge a fee, it's worth checking the fees and costs you need to pay for a transaction account so it doesn't eat into your savings. 

Overall, a high-interest savings account could help you grow your savings without much additional effort on your part. But it's worth comparing other savings options, like term deposits, before deciding on a savings method that fits your money attitude and goals. 

Can you have a joint account for your savings?

Many lenders offer joint savings accounts, where two or more people have access to a common bank account. Joint accounts are often used by people in romantic relationships, although they can also be used by friends or relatives wanting to pool their savings to reach a shared goal. 

It's important to only open a joint savings account with people you trust, as they will be able to withdraw any money you deposit in the account.

You can open a joint savings account online in just a few minutes, or by visiting a bank branch. In either case, you'll need to provide identification and contact details for both parties, as well as your tax file numbers if you don't want to be taxed at the maximum rate. Just fill in the application and submit it to the savings account provider of your choice. 

What are some savings account traps to avoid?

Just because savings accounts are considered low risk, doesn't mean there aren't common mistakes you can make, such as: 

Falling for introductory rates

Some people are shocked when they sign up for a savings account with a great rate, only to discover later on that they're earning less interest on their savings than they expected. Some banks can offer higher introductory rates for a few months to attract new customers, which can then revert to much lower ongoing rates. If you're not careful, this low rate may be buried in the fine print. Do your research before applying for any savings account

Not meeting conditions

If you don't meet your conditional savings account's requirements, you may miss out on some serious savings. In some instances, an account's base rate may be zero, or just above it. Making this mistake time after time could cost you years towards your savings goals.

Big savings but little risk 

Ironically, another way some people misuse savings accounts is to deposit too much money. Savings accounts often deliver lower returns than other investments, and some have a maximum balance limit. Once your balance reaches a certain amount, it might be worth considering withdrawing some of the money to invest elsewhere. Just make sure you understand the higher level of risk associated with your new investment.

High fees

Some savings accounts can charge higher than average fees. Children's accounts, for example, are known for offering high interest rates but charging high fees to compensate. Use comparison tables and savings calculators before you apply for any savings account to make sure you aren't taking steps backwards on your savings journey due to costly fees. 

Are high-interest savings accounts worth it?

Making any investment work for you can require taking a well-informed, smart approach and looking at the long-term use of the savings accounts offering high interest. You have to stick to the account terms diligently for the entire time you operate the account, but you also have to decide when to move your money into a more beneficial investment option. For instance, you could save up a certain amount and use it to pay the deposit on a home loan. Alternatively, you could set aside a part of your savings for trading in the stock market. 

Saving up money need not always be an investment - you may need the cash for emergency expenses such as hospitalisation or house repairs. You could also accumulate a vacation fund or a nest egg for your retirement.

Regardless of your reason for saving, you'll need some amount of financial discipline to ensure you keep depositing funds regularly and earn the maximum interest possible. Also, remember that even the best high-interest savings account may not always be the most suitable for your needs, and you should compare different accounts periodically to see if you can save more by opening a different account. 

Fact Checked

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

Frequently Asked Questions

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.