What types of savings accounts are there?

If you're looking to grow your savings, it might be time to invest in a savings account. Alternatively, you might want to switch savings accounts to take advantage of a great interest rate. Either way, evaluating the different options available means you’ll be in a more informed position to find one that suits your saving goals.

A savings account allows you to grow your savings by offering higher interest rates compared to your typical transactional account. Some savings accounts can be linked to your everyday account, making it easy to deposit money frequently. Other accounts cannot be linked in an attempt to stop you from dipping into your savings before you reach your target.

Here are some of the most common savings accounts and how they work.

Online savings account

This type of savings account, as the name implies, is only available online. It usually offers a higher interest rate as there’s less administrative work for the bank. But this also means you can’t access your funds through a physical branch. This account is suitable for people looking to make the most of their savings and who like to do the majority of their banking online.

Cash management account

This account serves as a convenient hub for you to manage your investments alongside your savings and other finances. It allows you to move funds easily between different investments and access all of your financial information in one centralised location. If you struggle to juggle your mortgage, investments and other accounts, than a cash management account may be the option for you.

Introductory rate savings account

Some banks or financial institutions offer introductory interest rates to potential new customers as a bonus for opening an account with them. These savings accounts come with higher interest rates for the first three to six months. After this time, the introductory rate reverts back to the account’s base interest rate. This is beneficial for those with short-term saving goals or people who don’t mind frequently switching savings accounts.

Bonus saver account

Bonus saver accounts reward you with higher interest rates by meeting certain criteria, such as not touching your funds for a month or meeting a minimum monthly deposit. If you need some motivation to keep your savings on track, then this might be the account for you.

Children's savings account

If you're looking to educate your kids about the importance of saving, then a children's saving account is a great place to start. With certain institutions offering bonus interest rates for a minimum monthly deposits or no monthly withdrawals, these features can help instill positive savings habits in kids from an early age.

How to compare savings accounts

When choosing your new savings account, it’s important to consider how frequently you’ll need to withdraw cash and how often you’ll realistically make deposits. This will give you a good idea of which interest rate offering has the best return for your savings. Make sure to also consider:

-Monthly fees
-Minimum balance amounts
-Whether you need a linked account
-Penalties for withdrawing money

How does InfoChoice compare savings accounts?

For more than 20 years, InfoChoice has been helping people make an informed decision about their financial purchases.

By using tools that are comprehensive, accurate, informative and up to date, we help people find, compare, choose and apply for a range of products.

InfoChoice makes comparing savings accounts easy by listing options from financial institutions across Australia. You can compare:

· Maximum interest rate: This includes any introductory interest rates or bonus rates, which may last for a limited time only
· Maximum monthly interest: This is based off a default savings amount of $10,000
· Base interest rate: This doesn’t include any introductory interest rates or bonus rates
· Base monthly interest: Based off a default savings amount of $10,000

We also offer a variety of savings related calculators, to help you plan ahead. This includes the:

· Budget Planner Calculator

· Savings Plan Calculator

· Income Tax Calculator

· Term Deposit Calculator

· Credit Card Repayment Calculator

How does InfoChoice Compare?

Our results section is designed to be more versatile and functional, sorting and identifying particular preferences in order of best rates. Rather than only showing sponsored listings, our comparison tool allows you to tailor your search and compare with ease. At InfoChoice, we continue to improve our comparison tools and result tables with a large array of informative features already available.

Start comparing savings accounts today and take your cash the extra mile.

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