Save online to beat falling rates

With interest rates falling, savers looking for decent returns in an at-call deposit account will do well to look to the Internet.

A number of offerings only available online have the jump on other cash management style savings accounts. Their higher rates and lower fees are made possible because accounts are less costly to maintain online with no branch access.

St George's DragonDirect savings account offers 6 per cent interest, no account fees, with account applications accepted over the Internet or by phone. It has been promoted since August in Queensland and Victoria only, but is actually available nationwide.

AMP Bank's eASYSAVER account currently offers 5.8 per cent for balances over $25,000. To encourage people to save there is no minimum balance, monthly fee or transaction fees for deposits and electronic withdrawals. However, fees do apply for some services such as withdrawals via bank cheque.

ING Direct is a ‘virtual bank' with no branch presence. Its Savings Maximiser account offers 5.6 per cent at-call with no account-keeping fees. It can only be opened online and withdrawals can be made via transfer to a savings account at a conventional bank.

Compare at-call deposit rates around the country.

Of course, those who have a home loan with a full offset account attached can do even better. Invested savings then earn an effective return equal to their home loan interest rate, say 7.5 per cent.