The best savings accounts in June 2023
How quickly times change. In the space of two years the interest rates available on Australian savings accounts have quickly switched from edging closer and closer to zero, to rising to the highest levels they've been in a decade.
It's fair to say that the $1.37 trillion that Aussie households have stashed away in their savings and other deposit accounts isn't working as hard as it could be though.
Just 16% of respondents to a survey conducted by comparison website Finder earlier in the year knew the rate they were receiving with their savings account, while more than half were storing their savings in transaction accounts which, typically, pay no or little interest.
Alison Banney, money expert at Finder, says that while this apathy was understandable when rates were relatively poor, people are missing an opportunity now that the savings landscape has shifted.
"I think people can be forgiven for not realising how much they've gone up. Before last year the rates on savings accounts were quite low, but since the RBA started raising the cash rate, the banks have lifted their savings account rates quite substantially."
What does a competitive savings rate look like?
Savers who haven't given much thought to savings rates in recent months might just be in for a pleasant surprise, as the days of returns below the 1% mark are long gone.
"At the moment, anything over 5% is really good. Even over 4.5% is quite competitive today," says Banney.
"One of the best in the market right now is 5.50% with ING's Savings Maximiser, and it's an ongoing rate, so you get that every month that you meet the account conditions.
"Macquarie's Savings Account is also really good. They offer 5.55% which is slightly higher than ING, however, it's an introductory rate, so that only applies to the first four months and then it drops down."
While the ING and Macquarie interest rates are among the highest currently available, there are also plenty of other competitive options. In fact, according to the Finder database, there are currently 25 savings accounts with an interest rate of 5.00% or above.
Given the depth of competition, Banney believes that anyone on a rate below 4.00% could find it worth shopping around.
"It does depend on your balance though. If you've got quite a large savings balance it's definitely worth switching because the more money you have, the more you're going to benefit from the higher rate.
"But if you're just starting out and you're on a rate of 4.00%, but you really like the account and the conditions are easy to meet, then you probably don't need to run out and change today."
Banney stresses that while the interest rate is an important feature, savers will need to find an account that suits their needs.
A bonus rate, for instance, could be great for those able to meet any monthly conditions, while an intro rate may be suited to those willing to move their money around. Alternatively, an account with a high base rate could be ideal for those simply looking for a place to park their cash.
Highest savings account rates - June 2023
With that in mind, here are the accounts currently offering the highest ongoing savings rates and introductory savings rates in the Finder database.
How much could you make by switching?
So how much could savers stand to make by making the move to an account with a higher rate? That will depend on factors like the existing balance and the difference between the new and old rate, but it could be a matter of thousands of dollars in additional interest per year.
For example, here's a scenario showcasing the annual difference in the balance of two accounts: one with a 4% rate and one with a 5% rate, assuming a regular monthly contribution of $250.
Ultimately, Banney believes that given the ease of comparing and switching, savers can make their money work a little harder for minimum effort.
"I just think it's important to check your rate at the moment because you'd be surprised how many people don't know what they're getting and how much rates have changed in the last four months. So it's a very quick win to change a savings account and get some free money."
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