How to make the most of your savings account
Top tips for getting the most out of a high-interest savings account.
Now, more than ever, it’s become important for Australians to build on the current savings they have. Whether it’s for a rainy day or a house deposit, the range of ‘savings’ accounts out there can make it hard to understand the ins and outs of achieving your goal.
If you’re still putting your savings into an everyday transaction account, that your debit card is likely linked to, you could be missing out on the benefits of a high-interest account.
Everyday transaction accounts often accrue little to no interest and are very easy to dip into, whereas a high interest savings product will come with an attractive interest rate and features that encourage you to save. Here’s what to look out for to make the most of your hard-saved money.
Set up different accounts for separate needs
Keep your everyday account linked to your card for receiving income and spending where necessary, but create separate accounts for your bills, expenses and savings goals.
Depending on your bank, it may be possible for you to create several different high-interest savings accounts so you can earn interest on your holiday fund, mortgage deposit and ‘emergency’ savings separately.
This will make it easier to visualise your progress. Win!
(Actually) read the terms and conditions
We know terms and conditions can seem complex and boring to read, but they can make the difference between earning interest or missing out because you made too many withdrawals in one month.
Some savings accounts may have conditions where you must keep minimum balances or make a number of deposits each month to be eligible to receive interest or bonus interest rates.
Shop around for the best deal
Every bank will have a different set of terms and conditions, interest rates and features for their products. Don’t be afraid to use a different bank for your savings than your everyday transactions.
Take advantage of free comparison sites like Savings.com.au to see who is offering what and what’s best for you.
Set up automatic payments from the account your salary comes into to your bills, expenses and savings accounts.
This way you won’t miss out on any interest and will be building towards your goal without having to think about it.
Schedule regular check ins
Try to sit down each month and see whether you’ve hit your goal or not. If you haven’t, that’s okay, think about what you can change next month.
Can you get rid of that gym membership or eat out less next month? Read our article on budgeting for more tips.
The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.