How to compare high interest savings accounts

If you’re in the market for a new savings account, why not invest in a high interest savings account? Offering higher returns than a regular transaction or basic savings account, a high interest savings account is a simple way to grow your savings.

As the name suggests, a high interest savings account comes with a higher interest rate per annum than many other types of accounts.

Compared to a regular savings account where you might be able to easily deposit and withdraw money at your leisure, a high interest account helps force you to save money.

To make the most of your interest rate, you’ll likely be required to make a minimum monthly deposit. There might also be a restriction on how much money you can withdraw without being penalised. Think of these features as a way to force you to learn new savings habits.

Features of a high interest savings account

When comparing savings accounts, make sure you consider how its features impact your savings. Some of the features include:

  • Opening or minimum balance: Some savings accounts require a minimum amount in the account at all times. You’ll need to ensure you have this money available to deposit when you open the account
  • Minimum deposits: To take full advantage of the interest rate, you might be required to put away anywhere between $10 and $10,000 each month. If you can commit to saving a certain amount each month, you’ll see your interest continue to grow
  • Withdrawal restrictions: Withdrawing money impacts the amount of interest paid, so many lenders put restrictions on how much money you can withdraw before being penalised
  • Interest rate: Your bank or financial institution might offer you a competitive interest to encourage you to open an account with them. When making your decision think about how much interest you’ll earn, plus how often it will be paid
  • Applicable account fees: From monthly account fees to ATM or over-the-counter withdrawal fees, these charges will come out of your savings
  • Linked accounts:Some types of savings accounts can be linked to other accounts such as a debit account or credit card. This can be useful if you like to move money between accounts with ease

Reasons to invest in a high interest savings account

There are many reasons to invest in a savings account. Perhaps you've never invested in a savings account, or maybe you're looking to swicth savings accounts.

Some people have a specific goal they're saving towards, such as a deposit on a new home, a new piece of art or an overseas adventure. Others might simply be building an emergency fund to ensure they're never strapped for cash.

There's no such thing as the best time to save. Start by comparing high interest savings accounts today and let Infochoice help you find the right savings account you're looking for.

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