People with savings have watched in despair since the coronavirus-crisis began gripping the world.
But there are still ways to snare decent savings – if you are savvy… or just plain lucky.
Also read: 5 biggest mistakes refinancers make
Here are the four most effective strategies.
Rate hack 1: Move with the market
ING has long held the reputational clout when it comes to savings rates. It’s not always offered the best actual rates though.
And that is true today.
At the end of last week, Virgin Money swept in with 0.3 per cent of additional interest for the first three months, to bring its total potential interest rate to 1.5 per cent and trump ING’s market-leading 1.35 per cent.
That 0.3 per cent is a straight-up promo or introductory amount but, here, we are really talking ‘bonus’ interest rates, where you have to meet certain conditions to qualify for the full amount.
The Virgin Money bonus 0.3 per cent is available for new customers only who open a Go Account and Boost Saver bundle. To also earn the 1.1 per cent possible bonus rate, they need to deposit $2,000 or more from an external account each month and make five purchases, direct debits or BPAY transactions at a minimum (the under-25s must meet other conditions too).
To secure ING’s total potential 1.35 per cent, which don’t miss is a fully ongoing deal rather than a portion of the interest for three months only, you have to hold an Orange Everyday bank account and similarly make five purchases, but you need deposit just $1,000 from an external account. However, you must also grow your Savings Maximiser balance each month.
So, there are some high hurdles to clear with each account.
What if most months you think you’ll fall short? Then, instead, you need the accounts with the highest base rates.
Rate hack 2: Know the best ongoing rates
Yes, if your saving and spending is more sporadic, you want an account with the highest base rate. The best currently has no potential bonus rate on top at all.
One, the top-of-the-table Macquarie Bank savings account, has a 0.15 per cent promotional rate at the moment, bringing its total interest to 1.1 per cent.
Then there is the dedicated ‘get the higher interest while it lasts’ category to consider (as opposed to the Virgin Money hybrid promotional and bonus interest product).
Right hack 3: Become a rate tart
Most ‘now you see it soon you won’t’ deals today last for four months. Of course, to make the most money, that means you have to leave after four months.
But for people with significant savings, that could be well worth it. The table below shows the accounts with the highest promo or limited-time component of interest.
By milking this category, you can earn up to 1.35 per cent… this time with Robobank Australia’s High-Interest Savings Account.
As this is below Virgin Money’s three-month promotional and bonus rate for new customers (remember totalling 1.5 per cent), and equal to ING’s ongoing bonus product (1.35 per cent), if you can meet the conditions of either of those, you’d opt for them instead.
But if you can’t, this is where the short-term promotional rate is great.
You could work your way through all three of the promo rates listed in the table, buying yourself an entire year of over-the-odds interest.
The final opportunity to optimise your interest comes down to sheer luck. Well, age really.
Rate hack 4: Take up the age-restricted office
It is happy days if you are under 30 and eligible for Westpac’s bonus age-restricted account. You need to be 18 to 29. You also need to grow your account balance, make a deposit and also five eligible transactions each month.
Provided all those planets come into alignment, you can secure a market-beating 3 per cent.
But, Bank of Queensland’s Fast Track Starter Account is open to customers all the way down to age 14, this time cutting out at age 25.
The conditions might be more easy to meet for some people too: deposit $200 at least from an external account and make five eligible purchases or transactions per month. The interest rate is a second-best-in-market 2.5 per cent.
The next-best anyone can then do is that Virgin Money three-month-bonus product, at 1.5 per cent.
I hear you ask: What about locking money away in term deposits?
It’s really not worth the bother. The best you can do is 1.4 per cent a year over four years or 1.6 per cent over five years.
Is it time to switch savings accounts?