Raiz vs Spaceship vs High Interest Saving Account - by Jason Bryce
What is the best, easiest, fastest way to save money? A high interest savings account? Or a micro-investing app like…
With several types of savings accounts available, it is important to choose one that suits your needs and lifestyle.
InfoChoice makes comparing savings accounts easier, giving potential customers the right tools to research everything from low fee accounts, online only accounts to high interest accounts and more.
Whether you want to open an online savings or a children’s savings account, InfoChoice allows you to search and compare in one place. You can compare features such as monthly account service fees and access options, and read breaking information about savings accounts in our news and guides section. You can also work out how much interest you’ll earn by using our savings calculator and term deposit calculator. Some accounts will take you the provider’s website so you can open your account online today.
Start comparing now and arm yourself with as much information as possible to make your savings account decision as easy as possible.
Savings accounts are accounts held at a bank or financial institution.
These accounts enable customers to save money and accrue interest on the amount of money they have deposited into a specific type of savings account.
There are different types of saving accounts for all types of age groups from children through to pensioners and can include Children Savings accounts, Self-Managed Super and Retirement accounts, Cash Management accounts, Incentive & Bonus Saver accounts, High Interest accounts, Online Savings accounts and Everyday Transaction accounts.
Savings accounts are different from transactions accounts.
Savings accounts primarily exist to help you grow your funds and have higher interest rates than standard transaction accounts.
As such, savings accounts allow you to save your money more quickly than transactional bank accounts, meaning you could purchase the high ticket items such as a new car or holiday sooner. You could even use a savings account for a deposit on a home.
Savings accounts usually require a minimum monthly deposit, to earn the high interest rate.
Savings accounts are usually online only accounts, that require no debit card, making it easier to save money and harder to dip into your savings.
Before you open a savings account, you will need to fill out an online application form, which will require all your personal details (name, address, date of birth, etc) and your tax file number to verify your identity. Once verified, you can deposit funds immediately in order to get started.
All savings accounts come with different types of features. Always weigh up the different options available, before you decide on which savings account best suits your needs.
Here are some of the features to consider:
1. Low/no fees
In most cases, banks don’t charge a monthly maintenance fee for a savings account. Look into all different types of fees they might charge you throughout the year. These fees may include annual or transaction fees. Once you have compared, pick the one with the least amount of fees so you get to keep most of the money in your account for your own personal benefit.
2. High or competitive interest rates
Higher interest rates mean you will end up with more money in your account. Always check the conditions for receiving the bonus or introductory rate. Be sure to check the standard rate as this is what your account will revert to as soon as your introductory period is up.
3.Accessing your money
The purpose of a savings account is to try to save your money rather than access it regularly and deplete the funds. Most savings accounts only allow minimal withdrawals and some don’t allow any at all. You will be charged for each withdrawal, but some see this as an incentive to not touch the account.
4. Deposit requirements
Most savings account require that you make a minimum deposit each month in order to earn your interest. Find one that works in with your budget, so if you have a tighter budget, you may need an account with lower minimum deposit amounts.
5. Linked accounts
In order to access your money for withdrawal purposes, you will need a linked account. Some banks allow you to link a savings account to your current transaction account. Linking your accounts means you are able to transfer money from one to the other with ease via online banking.
6. Multiple Savings Accounts
Many banks allow you to open multiple savings accounts at no cost. This is a great way to save up for different products or services at the same time. Multiple savings accounts can help you put a little money aside every month into each of your nominated savings accounts to help you keep track of your savings goals.
Tip: Rename your accounts, so you know what each account is for.
A high interest savings account is a savings account that offers a highly competitive interest rate. All high interest savings accounts have variable interest rates, which means your interest rate will fluctuate in response to changes to the Reserve Bank cash rate.
InfoChoice can help you compare over 188 high interest savings accounts:
Savings accounts are specifically designed to help you save money, therefore most of them don’t charge maintenance fees and give you higher interest to help you reach your goals sooner.
You’ll be able to start earning compound interest (the interest you get on the money you initially deposited, called the principal and the interest you’ve already earned) the moment you put money into your account. The highest interest rates are usually made up of a base rate and a special rate.
Conditions always apply, they could include a minimum monthly deposit amount or monthly withdrawal limits.
High interest rates savings accounts come with myriad features, following are the ones you should be most aware of.
1. Competitive rates
One of the most important features to look out for is long term competitive rates. Many savings accounts entice you with an introductory offer, but then revert to a standard rate once introductory period is up.
2. No account fees
Many savings accounts don’t charge monthly or annual fees. However, it is important to know what other fees you may charged, as there may be transaction fees for ATM or over the counter withdrawals.
3. Automatic transfers
You may be required to maintain a certain monthly balance in order to receive the highest interest possible. The easiest way to ensure that you do this is to set up automatic online transfers, so you know the minimum repayment is being made each month without fail.
There are a couple of ways to get the most out of your savings account. Firstly, check if there’s a special rate that’s available to you provided you meet the requirements. These requirements could be as simple as not making any withdrawals for the month or making sure the minimum monthly amount is being deposited on time.
The second way is to build up your balance.
The more you have, the more interest you will earn because your interest is calculated as a percentage of your account balance.
Tip: If you have any money sitting in an account that isn’t needed in the near future, put it in to a savings account to help boost the interest you will earn.
Applying for a savings account is an easy thing to do, with savings accounts available to everyone. However, consider the following before choosing which account best suits your needs:
1. Select an age appropriate account
If you’re under 18, look into kids savings accounts as they have special offers to help you get started when you have a smaller amount of savings to start with.
2. Minimum deposits
Most accounts can be opened with a very small amount of money, but some may require a minimum monthly deposit from you. If that is the case, determine how much that might be and if it’s within your budget.
3. What’s the best way to open a high interest savings account?
You can usually open a savings account over the phone, online or in a bank branch if you prefer.
4. What information will I need to apply for a high interest savings account?
As with all accounts you’ll need a few details in order to apply, including your contact details, personal details and identification. If you have a transaction account that you would like connected to the savings account, be sure to have those details available too.
Online savings accounts are a great option if you don’t want to pay fees, but you do want to earn higher interest.
An Online Savings account is a no frills savings account option that offers higher interest than normal transaction accounts.
However, the pay-off is an account with restricted access.
Over the counter and cheque facilities are not included in online savings accounts. Customers are required to make all transfers either online or over the phone rather than at a branch. That said, the majority of online savings accounts need to be linked to a transaction account in order to run.
Online savings accounts have a variable interest rate which means they are subject to fluctuations. However, many online lenders offer introductory high interest rates which will only last for a few months. As such, you should always find out what the standard rate will be once the introductory period is over.
Bonus rates are also available from most online lenders. You can take advantage of bonus rates by making regular minimum deposits to your account.
Online savings accounts are the easiest option for most people, as you don’t need to visit a branch to do anything that is related to this account.
InfoChoice compares over 85 Online Savings accounts:
Your online account can easily be accessed via internet banking whether it be through the website or phone app. All you will need is a username and password.
Provided you already have an internet banking account, it is relatively easy to open an online savings account. Most banks offer savings accounts; all you need to do is log into your account and search for the ‘new accounts’ tab.
You usually don’t need to fill out an application if you already have an online transaction account.
This is the perfect time to open a couple of different savings accounts for different goals and don’t forget to name them so you know what each one is for.
A Bonus Saver account, also known as an incentive account, is a savings account that rewards you in the form of bonus interest rates when you meet certain conditions such as not missing any of your minimum monthly deposits or making no withdrawals.
Some banks may require that you link your savings account to a transaction account in order to qualify for the bonus rate.
Some banks require that you make a minimum repayment of $20 per month, in order to unlock these bonuses. However, other institutions may require a larger monthly deposit. Always check with the bank to see what your repayments will be before you sign up.
InfoChoice compares over 73 Bonus Saver accounts:
These accounts are designed to help you save money. The bank looks at how much you have put into the account and compares the amount from the first day of the month to the last to ensure it has increased by a set amount. If you have increased your savings to their requirements, then you will receive the bonus interest.
The bonus rate is an additional percentage determined by the bank and then added to their standard variable interest rate.
With an Introductory Bonus account you need to be a new customer and your high interest rate will only be valid for a few months. After that time it reverts to the standard rate.With a Bonus Saver account, you usually receive the bonus interest when you’re able to deposit a certain minimum amount per month and make no withdrawals. You don’t necessarily have to be a new customer for this account.
No! The bonus interest is available for each month that you meet the requirements. So if you miss one month, that is the only month that will be affected.
When comparing bonus saver accounts, compare the following features:
A Cash Management account is an account held with a financial institution that lets you earn higher interest, gives you easy access to your savings and allows you to move funds between accounts and investments. As with all types of accounts, the interest rates, features and conditions vary from bank to bank.
A cash management account is basically a savings account, however some financial institutions refer to them as investment accounts.
Having an account such as this, means it is a lot easier for you to access your money whenever you need it. Many of these accounts come with online trading platforms to save you time when managing your investments.
InfoChoice compares over 30 Cash Management savings accounts:
These accounts tend to offer higher interest rates in comparison to standard savings accounts. Oftentimes, these accounts have high balances, which means the amount you earn in interest could be quite substantial.
Unlike other savings accounts, cash management accounts allow you to access funds at ATMs and allow you to pay bills via BPAY.
Another great benefit of a Cash Management account is that all related transactions appear on a single statement. This could be very useful when it comes to tax time.
Keep in mind that cash management accounts usually have requirements such as a minimum account opening balance. This can be anywhere from $5000-$10,000.
Some accounts have a minimum monthly deposit requirement, whilst others don’t.
Always compare the relevant minimum deposit amounts before locking in to any particular account.
As with most accounts you need to be over 18 years of age top open a Cash Management account. However, some institutions will allow you to be eligible from 16 years of age. You will need to be an Australian resident in order to apply.
Yes you can. When applying for any account you will always be asked to verify your identification, age and residency status.
By comparing the following features you will be able to make an informed decision as to which account is best for you:
1. Interest rate
Check out what interest rate is being offered. Some institutions have the same interest rate no matter how much you deposit. Others, have a tiered system depending on the amount you put in.
2. Access to funds
If you would like to be able to access your funds whenever you need them, look for funds that allow access and payments via ATMs, EFTPOS, Internet banking, phone banking, cheque books, branch banking, and even BPAY.
3. Fees and charges
Cash management accounts usually don’t charge monthly management fees. Online and phone transactions are usually free. However, it’s up to the financial institution as to whether or not they charge transaction fees, or use cheques and staff assisted transactions.
There are many savings accounts made specifically for children. These accounts are a great way to teach kids how to save and establish excellent money habits early on in life.
Interest rates do vary depending on which bank you go with, but there are plenty of institutions offering no fees and a range of features suited to kids through the Children’s Savings accounts.
Giving children access to their savings account, will teach them valuable lessons that will come in handy when they are grown up and financially independent. There’s no better way for children to learn about money, saving and banking than through a savings account designed specifically for them.
InfoChoice compares over 38 Children’s Savings accounts:
Children’s accounts usually allow free deposits and withdrawals. Many will offer a high level of bonus interest for the months when no withdrawals have been made.
The benefit of these two features are they teach kids that if they don’t touch their savings, they will be rewarded with bonus interest, and these accounts give them incentive not to withdraw money unnecessarily.
There is usually a bank imposed age restriction on children being able to open an account themselves, so in most cases you will need to open the account for your child.
Here are the features you should look for when considering a Childen’s Savings account:
1. A competitive interest rate
Children’s Savings accounts offer a higher interest rate for regular deposits and no withdrawals. It’s best to compare banks and see which one will give you the most competitive rate.
2. No monthly fees
There may not be any account keeping fees for a children’s savings account, but their account might have limited withdrawal limits.
3. Children’s banking programs in Australia
Some banks in Australia have programs that give children direct access to online educational portals and stationery which are all helpful to learn about savings and finances.
A Self-Managed Super Fund (SMSF) savings account is a convenient way to save and invest for your retirement, with many providers offering zero fees, good returns and flexible access options.
A SMSF savings account gives you complete control over where your superannuation is invested, as you manage the fund yourself rather than one that’s run on our behalf.
InfoChoice compares over 31 Self-Managed Super and Retirement savings accounts:
SMSFs aren’t always the right option for everyone.
There are a few things you need to take into consideration such as the amount of administration work that’s required to maintain an SMSF, the different costs involved and the benefits and risks to consider.
There are some basic rules that need to be adhered to when running your own SMSF. Make sure you meet the following criteria and stick to the rules:
The fund can accept contributions from employer contributions, personal contributions, salary sacrifice contributions, super co-contributions and eligible spouse contributions. All contributions must be documented and allocated to the fund member’s account within 28 days.
Each member’s concessional (pre-tax) contributions must not exceed $25,000 per annum and any member under 65 years of age can contribute up to $300,000 over three years in non-concessional (after tax) contributions. However, their total super balance must not exceed $1.4 million.
In order to remain compliant with the ATO there are some admin tasks that need to be performed each financial year:
There are several benefits to opening an SMSF savings account, here are the main advantages:
Annual Equivalent Rate (AER) | The interest rate if interest was paid and compounded once each year. |
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Automatic transfers | You may be required to maintain a certain monthly balance in order to receive the highest interest possible. Automatic online transfers ensure the minimum repayment is being made each month without fail. |
Bonus Savings Account | A Bonus Saver account, also known as an incentive account, is a savings account that rewards you in the form of bonus interest rates when you meet certain conditions such as not missing any of your minimum monthly deposits (usually around $50 or $100) or making no withdrawals. |
BPay | A fast and secure bill payment service that lets you pay your bills day or night, through your phone or Internet Banking. |
Cash management account | A Cash Management account is an account held with a financial institution that lets you earn higher interest, gives you easy access to your savings and allows you to move funds between accounts and investments. These usually have higher balances of $10,000 to $20,000 |
Children’s savings account | Savings accounts for children usually under the age of 14. Adults will set these accounts up for their children. Children’s Savings accounts offer a higher interest rate for regular deposits and no withdrawals. It’s best to compare banks and see which one will give you the most competitive rate. |
Compound interest | Compound interest is the interest you receive on money initially deposited (the principal). |
Debit card | A debit card is linked to a bank account. Holders of a debit card can make purchase transactions in-store or online and withdraw cash from ATMs. |
Deposit | The money a bank account holder puts into their bank or institution’s account. |
Direct Deposit | Money that is automatically debited from one account and deposited to a payee. For instance your employer makes a direct deposit of your wages into your bank account. |
High Interest Savings account | A High Interest Savings account is a savings account that offers a highly competitive interest rate. All high interest savings accounts have variable interest rates, which means your interest rate will fluctuate in response to changes to the Reserve Bank cash rate. |
Introductory Rate | A fixed introductory bonus on a variable interest rate account, for a set period of time. An introductory rate usually only lasts for a few months before base interest rates apply. |
Online savings account (OSA) | A savings account managed on the internet. Online savings accounts are a great option if you don’t want to pay fees, but you do want to earn higher interest. |
Promotional Rate | Like an introductory rate, the promotional rate entices people to open an account. The rate applies only for a specified period of time, before reverting to the base rate. |
Savings account | Savings accounts are accounts held at a bank or financial institution. These accounts enable customers to save money and accrue interest on the amount of money they have deposited into a specific type of savings account. |
Self-Managed Super Fund (SMSF) savings account | A SMSF savings account gives you complete control over where your superannuation is invested, as you manage the fund yourself rather than one that’s run on our behalf. |
Term Deposit | A term deposit is a savings account that you hold funds in for a pre–determined period of time, usually between 31 days and five years. During this period, the money is locked away and you can’t access it without penalties. |
Transaction account | The best transaction account is the account that suits your own way of managing money and spending. The best everyday banking account has low or no fees, lots of great ways to pay for goods and service in-store and online, like Apple Pay, Google Pay, Samsung Pay plus Eftpos, and a Mastercard or Visa debit card included. |
Withdrawal | Cash that you take out of your account. |
A transaction account is a basic bank account used for everyday transactions and expenses, as well as payments to other accounts. This is the account that most people have their salary paid into. You need to be 16-years or older to have a transaction account.
Savings accounts or high interest savings accounts, are bank accounts that you can deposit money into for the purpose of saving. Interest accrues on the money you deposit. They are designed to grow your funds and not be used for everyday transactions.
The Australian Government guarantees deposits up to $250,000 in Authorised Deposit-Taking Institutions (ADIs) such as banks, building societies or credit unions. This means your money is guaranteed by the government and financial regulator APRA to be paid back to you if your bank becomes bankrupt or if something happens to your money.
Yes, savings accounts can be opened in joint names. It’s a great way to pool your money and earn extra interest due to your combined savings
Opening a savings account is easy provided you already have a transaction account and are signed up for online banking. Each bank has a slightly different process, but put simply you log into your account and follow the tabs to open a new account. You can also call your bank and organise it over the phone.
A transaction account is your everyday account where you can do everything that you need with your money. You can receive your income as well as pay bills and transfer money between accounts and other people. A savings account is more for saving and less for spending.
Yes, you will receive a debit card or key card so you will be able to withdraw money from ATMs and make in-store purchases.
All banks have different fees. Most don’t have monthly maintenance fees, but they do have charges for ATM withdrawals, transaction fees (both domestically and internationally), overdraw charges and assisted banking withdrawal fees.
If you’re working , studying or migrating to Australia, you can open an Australian bank account. When applying, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia. In some cases you may be able to apply for the account online or over the phone before you arrive in Australia.
Yes, Australian bank accounts are frozen when someone dies. In order to close the account you may need to provide proof of death and a copy of the will. You may also have to prove your relationship to the deceased person.
In most cases you cannot set up direct debits from your savings account, as your savings account is predominantly for building up your funds not spending.
Most savings accounts don’t allow overdrafts unless it has been prearranged. However, having an overdraft defeats the purpose of having a savings account and could cost you in unwanted fees.
Yes. You can either make once off payments or organise regular deposits. Setting up direct deposit is a great way to build your funds without having to consciously do it.
Interest is calculated on a daily basis using the following formula: Daily Closing Balance X interest rate applicable to your Account/365 Interest calculations are rounded up to the nearest cent and is usually credited to your account on the last day of every calendar month and on the day that the Account is closed.
HISA use compound interest that’s calculated daily and paid monthly. High-interest savings accounts are guaranteed by the government, and accrue interest at high rates.
If you are able to build your funds in your savings account and won’t need to make withdrawals, opening a high interest savings account is the best way to earn more interest and bonus interest if certain conditions are met.
Yes. Savings accounts use your own money so as long as you have enough for deposits, you will not have a problem. Credit checks are only conducted for credit card and loan applications.
Generally there are three types of bonus saver accounts: bonus rates, promotional rates, introductory rate offers.
Most times you will only need to do two things to continue to receive bonus interest. Make minimum monthly deposits and make no withdrawals.
Even though the account is for a child, accounts can only be opened by an adult, usually a parent, guardian or adult signatory. You’ll be able to open the bank account online, but in some instances you may still need to visit a branch to verify identification details.
No, you don’t need a tax file number unless your child earns more than $416 in interest. You can apply for a tax file number for a child of any age via the ATO.
Yes, most administration services and fees are tax deductible.
The sole purpose test means that a super fund is maintained solely for retirement benefits for the members, or death benefits for the members’ estate, resignation or disability benefits.
A breach of the sole purpose test could lead to significant penalties being applied to the person who contravenes it.
These are the types of contributions accepted:
Salary sacrifice is when you contribute to your super from your salary before income tax is deducted at your marginal tax rate. This reduces your taxable income.
Most savings accounts do not come with a bank card so it is a little trickier to access your funds if you need to make a withdrawal. The easiest way around this is to have your savings account linked to a transaction account so you can easily transfer funds to your transaction account.
Most banks have their own ATMs in easily accessible locations. If you use your own bank’s ATM you usually won’t be charged an ATM fee. However, using another bank’s ATM could cost you around $2.50 per transaction in ATM fees.
Doing research online will give you many of the answers you are after. It’s easy to compare all sorts of aspects such as fees, interest charged and interest earned. If you prefer face to face help, you could always go in to a few branches and see what they can offer.
An online savings account should not have any minimum balance requirements. Some even allow you to open an account without any initial deposit.
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The number of savings account on offer can make it difficult to choose a good deal. But finding the right account is easy with InfoChoice.
Whether you want to open an online savings or a children’s savings account, InfoChoice allows you to search and compare in one place. You can compare features such as monthly account service fees and access options, and read breaking information about savings accounts in our news and guides section. You can also work out how much interest you’ll earn by using our savings calculator and term deposit calculator. Some accounts will take you the provider’s website so you can open your account online today.
Whatever your savings goals, the right savings accounts can help you get there faster by offering great features such as higher interest rates or zero fees.
Whether you’re a regular or occasional saver, business owner or investor, find your ideal savings account using our comparison tables, get up to date with the latest savings news, or learn more about your savings options in our handy guides.
Need some extra motivation? Use our savings calculator to work out a game plan for achieving your goals.