Savings accounts with no strings attached: the best rates

Finding a savings account that doesn’t require you to jump through hoops to earn decent interest has become tough in recent years, but times may be changing.

Savers have long been frustrated by short-term bonus interest rates retreating to virtually zero after a few months, limits on withdrawals and transactions, minimum monthly deposits and other terms and conditions. Some hurdles are promoted as prompting people to save, but in reality they deliver banks bigger interest savings. However, Ratecity.com.au research director Sally Tindall says a savings shake-up has started.

“Macquarie is leading the way with no monthly terms and conditions on their main savings account and a decent ongoing rate at 3.45 per cent,” she says. “Macquarie is also offering 3.45 per cent on their transaction account – the vast majority don’t offer a cent on their transaction accounts. ANZ is also offering 3.5 per cent on an ongoing basis with no monthly terms and conditions.” Tindall says people seeking a good, simple savings account will need to do their research, and comparison websites can help.

“Spend five minutes reading the fine print – it could save you hundreds of dollars in the long run,” she says. “Savings accounts are incredibly complicated for a reason – some of those pesky terms and conditions trip customers up so the banks don’t have to pay out the maximum interest on every dollar for every customer,” she says.

Canstar group director financial services Steve Mickenbecker says banks want to keep the cost of funding their loans down, and they understand that customers often leave money in accounts with very low base rates. “That’s why they designed such complex structures for their savings accounts,” he says.

“Over the last six months banks have not increased the base rates very far. On average they’re about half the increase the Reserve Bank has put through.”

He says simple savings accounts are “few and far between” and consumers should not be blinded by high headline interest rates if they soon drop back towards zero.

“Don’t overlook term deposits for two, three or four years,” he says. “But don’t use all your money and put it all in one term.”