What to consider when comparing savings accounts

Whether you’re putting money aside for a rainy day, a holiday or a house, the right savings account could make all the difference. There are a range of options on the market, so it’s important to have a good understanding of how you will use your account in order to choose the one that’s right for you.

Here are some things to consider when comparing savings accounts.

1. How much money will you be starting out with?

Often there are no minimum requirements, but some accounts may require a minimum opening deposit. The amount will vary depending on the account – it may be as little as $10 or as much as $10,000.¹

2. Will you be making regular deposits?

Some accounts require regular deposits for bonus interest to kick in – for example, $1000 a month. If you’re planning to squirrel away a set amount from your income every month, an incentive or bonus saver account might be the one for you.

3. Do you intend to make withdrawals?

If so, make sure you check whether there are any withdrawal fees. Also, many savings accounts don’t facilitate BPAY and direct debit transactions. These features are usually attached to an everyday account.

Bear in mind that many incentive or bonus saver accounts work best if you make minimal withdrawals.

4. Do you have accounts with different institutions?

Some people have multiple accounts with different banks, while others stick to just one account. If you’re opening a savings account that uses a linked account for transactions, it’s worth checking whether both accounts have to be with the same institution.

5. Is your savings goal long term or short term?

Some accounts offer high introductory interest rates for a set period of time. If you have a short-term savings goal, these can be a great option.

It can even be a nice way to kick off a long-term savings plan – just be sure to check what the interest rate will revert to once the introductory period is over. You may end up finding an account with an ongoing rate that works better for you.

6. Are you happy to bank online?

Some accounts offer lower fees if you’re happy to take care of your banking online. This can be a convenient option for some, but if you prefer to go in to a branch or use the phone, an online savings account might not be right for you.

Choosing the right savings account for your needs may help you reach your goal sooner. Start comparing savings accounts now.