Online saving accounts now paying 4 – 5 per cent

Online saver accounts are paying annual interest rates of between 4.25 per cent to 5 per cent, though some have bonus and promotional rates on top of that.

To get those bonus rates, about half a percentage point, a minimum account balance may have to be maintained or a minimum amount must be deposited regularly into the account. Sometimes, the bonus rate is paid only for a limited period after the account is opened.

The interest rates paid by online saver accounts and term deposits by banks, credit unions and building societies are determined by the official cash rate, the outlook for the cash rate and the competitive positioning of the providers.

Source: Sydney Morning Herald