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The $492 problem with common savings accounts

Lucy Dean
·3-min read
Angry online shopper complaining talking on phone
Image: Getty.

When’s the last time you put money into your bonus savings account only to have to access it later?

It’s a common problem, and it’s costing Australians hundreds, new analysis from Canstar reveals.

The comparison site found that 60 per cent of bonus savings accounts on its database won’t pay the bonus interest if the saver has to withdraw any money that month.

That means that if a saver with the highest bonus savings rate of 1.20 per cent and $50,000 in the account were to dip in, they’d lose $41 a month or $492 over the course of the year.

And someone with $10,000 in savings would lose $8 in bonus interest a month, or $96 over the course of the year.

“If you know you’ll need to dip into your savings occasionally then a bonus account with strict no-withdrawal terms might not be for you as you’ll need the flexibility to access cash without missing out on the interest earnings,” Canstar savings expert Ellie McLachlan said.

“When it comes to bonus savings accounts if you fail to meet the conditions, it could see you earn little to no interest that month.”

I’m guilty of this: Where should I put my money instead?

Canstar found the ING Savings Maximiser currently has the top bonus savings account, among accounts that allow access to your savings.

To access that 1.35 per cent rate, savers need to deposit $1,000 from an external account into it every month and make at least five card purchases.

Image: Canstar
Image: Canstar

McLachlan said the trick is to find the bonus savings account with conditions you know you can meet every month.

“Some of the conditions are fairly simple, requiring you to make a few deposits or transactions through the linked bank account each month.”

The other thing to consider is whether your spending habits need to shift, she added.

“Are there any opportunities to cut back on unnecessary items, start a side-hustle to boost your income, opt for secondhand over new or even try a no-spend month?”

Record low rates

The analysis comes as interest rates savings accounts continue to fall. ANZ and CommBank both slashed rates on popular accounts on Friday.

CommBank took its GoalSaver rate down 0.05 per cent to 0.40 per cent, and its YouthSaver account from 0.70 per cent to 0.65 per cent.

ANZ cut its Online Saver introductory rate by 0.10 per cent, taking it to 0.35 per cent, and its Progress Saver maximum rate from 0.50 per cent to 0.10 per cent.

That means the major banks have pulled their savings rates 1.26 per cent lower since January 2020, with the majority of their products offering rates around 0.40 per cent. The top products on the market have 1.75 per cent interest rates, or even 3 per cent rates for those younger than 30.

“Anyone with cash in the bank has to work hard to see any sort of decent return on their money,” McLachlan said.

“It pays now, arguably more than ever, for savers to find the best deal for themselves and not settle for a poor savings rate.”

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