• Donnelle Brooks

5 Best High Interest Savings Accounts 2021

Interest rates are at an all time low. This is great news if you have a mortgage, but bad news for the money sitting in your savings account! Why is that exactly? Banks make money by lending. When you have money in a savings account, they lend it to someone, making money for themselves and passing some on to you in the form of interest on your account. If the interest rates are low, they are making less money and will therefore give you less interest on savings accounts and term deposits. That's the simple version, and that's how we like to keep things here at the Account Ant!


Many people are turning to other ways of investing their savings while interest rates are low. However, there are reasons you may want to keep your savings in cash. Maybe you are buying a house soon and don't want to tie it up in investments. In that case, let's look at some of the best high interest savings accounts on offer right now


Overview

Heritage Target Bonus

UBank USave

My State Bank Bonus Saver Account

ING Savings Maximiser

Bank of Queensland Fast Track Saver

Dishonourable Mention: Westpac Life


As my Dad used to say - Look after your cents and your dollars will look after themselves


Heritage Target Bonus

Interest Rate: 0.95%pa

Base Interest Rate: 0.01%pa

Fees: $0

Conditions:

  • At least one deposit and no withdrawals must be made

The reason this account is at the top of the list is because it doesn't require you to have and use a linked spending account to get the bonus interest rate. You just have to be actively growing your savings. That makes it my choice, despite having a slightly lower interest rate than others in this list. You really want to meet those criteria though, or the interest rate is tiny!


This is a great account if you have some long term savings that you don't intend to touch too often. The interest rate is better than most term deposits at the moment! Heritage bank is a small Queensland bank with some branches in NSW. This doesn't stop you using their services online. Because they are smaller their call wait times are much lower than the bigger banks (I know this from personal experience).


Ubank Usave

Interest Rate: 1.10%pa

Base Interest Rate: 0.1%pa

Fees: $0

Conditions:

  • Deposit $200 monthly into a linked USpend account from a non UBank account

That name is fun to type! Other than that, this product is hardly unique. They offer similar conditions to other high interest savings accounts on the market. They require you to have a linked transaction account and use to it some extent to get the bonus rate. However, if you want that 1.1% interest rate, all you have to do is deposit $200/month from a non Ubank account, with no other transactions required.


This could be a handy little savings tool if you want to set up a savings account with extra interest and have it separate to your other money. Out of the three accounts that are mentioned that require a linked transaction account, this is the best deal and the most practical choice.


My State Bank Bonus Saver Account

Interest Rate: 1.20%pa

Base Interest Rate: 0.1%pa

Fees: $0

Conditions:

  • Deposit $20 or more monthly

  • Make 5 transactions per month from your linked transaction account

This offering from my state bank does have a slightly better interest rate than Ubank. However, it is lower on this list because it requires you to do more in order to get the bonus rate. Unfortunately, it still requires you to open and use a transaction account. There are no fees on the transaction account though, and only 5 transactions means you don't need to move all your banking to this service. So if that 1.20%pa interest rate is looking pretty good to you, I'd say go for it!


ING Savings Maximiser

Interest Rate: 1.35%pa

Base Interest Rate: 0.05%pa

Fees: $0

Conditions:

  • Deposit $1000 each month into your linked transaction account

  • Make 5+ transactions with your linked account

  • Balance of your savings account must be higher at the end of the month

ING has a reputation for offering high interest on their savings accounts, so it's no surprise that this is the best interest rate on the whole list. So why is it second last? Because the conditions you need to meet to get that interest rates are a bit complicated. Many people swear by ING though, so if you are willing to move your banking with them it's worth the hassle. One more thing to add - the 1.35% is an ongoing rate, not an introductory rate to lure you in. (I'm looking at you Commonwealth Bank)


Bank of Queensland Fast Track Saver

Interest Rate: 1.05%pa

Base Interest Rate: 0.05%pa

Fees: $0

Conditions:

  • minimum $1000 deposit per month into their linked transaction account

  • 5 transactions from your linked transaction account


It's sad that 1.05% seems appealing for a savings account, but that's the reality of low interest rates at the moment. The conditions needed to get this rate may not suit everyone. Basically, they want you to open a transaction account and get your wages paid into it. If you are happy to change banks, that's fine. However, if you are happy with your current bank you may not think it is worth switching all your banking to BOQ just for a few cents extra interest per month.


Dishonourable Mention

Westpac Life

Interest Rate: 3%pa

Conditions:

  • Must be between 18 - 29 years of age

  • Make 5 transactions per month from your linked transaction account

  • Westpac life balance must grow by the end of the month.


Excuse me? I'm going to go full Karen on Westpac right now. Obviously this product is designed to lure more younger bankers to Westpac, but I hardly think it is ethical to offer an extremely appealing interest rate to people based on age. Maybe I'm just salty because I am not in that age bracket anymore. But poo poo to you Westpac!


So there you have it. Those are the best high interest savings accounts currently on the market. If you are currently trying to build some savings, I highly recommend you head to this article for some tips on how to have your cake ad eat it too! Note: this post is not actually cake related, sorry!


Happy Saving!


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