A savings account is still one of the preferred mechanisms for storing cash. It’s a type of bank account that offers a higher interest rate than a transaction account, and charges fewer fees.

This is because it’s designed to help you save, not spend. So a savings account offers incentives for you to leave your money alone. Transaction accounts, by comparison, are designed for frequent use.

A transaction account caters for your day-to-day money needs, and thus comes with a bank card for ATM and EFTPOS access. For this service, you will generally pay more fees and earn less interest.

Just about every financial institution offers savings accounts, however not all savings accounts are created equal. Bank of Melbourne offers a range of savings accounts suited to different goals.

The type of savings account you choose is dependent on your how you wish to manage your money. For example, you might want a savings account that lets you withdraw funds at any time.

Or you might want a savings account that returns a higher interest rate for not withdrawing funds. As with all financial products and services, reading the fine print will help with your decision.

How do I choose a savings account?
The type of savings account you choose will be dependent on your financial situation. However, if you’re in the market for a savings account, Bank of Melbourne makes it easy to decide.

By jumping onto the website, you can browse the current range of savings accounts available. Different types of savings accounts will offer a different rate of interest based on your choice.

As previously mentioned, a term deposit (for example) generally offers a higher interest rate because you cannot withdraw funds for a specific period of time.

If you’re in a position to lock your money away and not touch it, this could be an attractive option. Or you might simply want a savings account that pays some interest, but you want to regularly withdraw from it. 

The published criteria for each type of savings account will explain the requirements, along with providing you with the terms and conditions. So read through these too!

Keep in mind that interest rates will always vary, so the interest rate offered today might be different in a month or year.  

How do I apply for a savings account?
To open a savings account with the Bank of Melbourne you will need to be at least 14 years old. So, if you’re a savvy tweenager, you will need assistance from a carer or parent.

You will need to have your tax file number on hand as well as identification such as a driver’s licence, Medicare card, birth certificate or passport.

What are the benefits of a Bank of Melbourne savings account?
The obvious benefit of opening a savings account is that you get to earn interest (more money) from what you’ve saved. How much you can earn will depend on whether the savings account has a maximum deposit limit or not.

Another reason to open a savings account – versus leaving your money in a transaction account – is the money you could save on fees and charges. This may not seem like much money – a few dollars here and there and a monthly account-keeping fee – but they can be avoided via a savings account.

As a Bank of Melbourne savings account holder you also get peace of mind knowing that your money is protected by law. The federal government guarantees deposits up to $250,000 per account-holder under the Financial Claims Scheme.

Other benefits of a Bank of Melbourne savings account include a handy banking app, so you can make deposits and check balances from your phone. Putting your money into a savings account also makes it easier to manage.

You can deposit funds at any time, access funds when you need to (whilst aiming to stick to a savings plan), and earn additional funds from your principal. A hidden benefit is the fact that your money is harder to access when in a savings account.

You can opt not to have a bank card for your savings account too, which is advantageous if you can’t resist dipping into your funds for impulsive splurges. 

Are there alternatives to a savings account?
Savings accounts are a safe and secure way of storing your money so that you don’t spend it and it grows in value (via interest). Alternatives to savings are investments such as home loans or shares.

However, because this is investing – rather than saving – there are more risks associated which could result in a loss of funds too.

You could opt to hide your money somewhere, which would not generate any interest and you might forget where it is.