Savings Accounts Australia

While a basic bank account such as a Every Day to Day Bank Account or transaction account offers basic banking services, if you have any excess funds accumulated in this account you can typically can receive a very low interest rate or no interest at all.

Why do Banks offer Savings Accounts in addition to an everyday bank account?

For individuals who would like the option to save excess funds for future use without incurring a very low or non interest on their deposits, Australian savings accounts are an option provided by banks and credit unions. They are typically linked to a basic bank transaction account on issued bank cards and similar to term deposit investments are considered a safe product compared to risky investments. They also have the same high liquidity of every day accounts but with a higher interest rate than everyday bank accounts.

Australian Savings Accounts compared to Australian Term Deposits

Both savings accounts and term deposit account options provided by Australian banks offer a higher interest than a standard transaction every day bank account. However term deposits because the interest is at a fixed rate for a set maturity will provide a typically higher return than the variable interest rate of a savings account. However the savings account is more highly liquid (accessible) while term deposits either need to wait until maturity or incur a penalty for early access.

Standard Savings Accounts compared to Online Savings Accounts

Since the internet has become integrated in modern banking, banks have an offered an additional online savings account options in Australia. For example ING direct an online retail bank, which has does not branch network in Australia offers stand alone online savings accounts. The interest rate on these online accounts can be higher than major banks. Not maintaining a large branch network can provide a lower cost base for such online banks. In addition to compete with various online product offerings, banks now provide online savings accounts that can be higher than their standard savings account.

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