Your savings account should be paying 5%

Bryce: [00:00:41] Welcome to Get Started Investing, the podcast, where we answer all your money and investing questions. My name is Bryce and today we are looking at the best savings accounts here in Australia and to chat through it, as always, is my equity buddy, Ren, how are you?

Alec: [00:01:00] I'm very good Bryce. Very excited for this episode. We like to periodically check in in the world of savings accounts to make sure we're getting the best. Well, we can talk about. What rate we're both getting. Absolutely. But in this episode, we're going to be covering it in three key ways. Best base rate? So no gimmicks, no spending, no deposits. Just what is the best rate you're going to give me and then leave me alone. Secondly, best honeymoon rates. These are only for A short period of Time. Yes, but not for what? Not. These are only for a short period of time. But when you loved up a new in a new relationship with a bank, they give you. 

Bryce: [00:01:45] Is that for new customers?

Alec: [00:01:45] Yes, yes. Come on. No, that's extending the metaphor there. I thought. Thought that what? So that's the second one. Best honeymoon. Right. And we'll tell you how long they last. And then finally, if people are willing to jump through those hoops and, you know, deposit, spend the way that the bank requires, what are the best overall rates? And the key takeaway we want to leave everyone with for this episode is if your savings account doesn't have a five in front of it, what type of switch? 

Bryce: [00:02:15] If it doesn't have a five in front of it? You need to keep listening, and if it does have a five in front of it, then you want to make sure that it has a 5.5 plus. 

Alec: [00:02:25] Just just listen anyway or tell a friend about it. 

Bryce: [00:02:28] Pass it on. But they'll definitely be something. I'm even looking at the numbers here and thinking about my current situation. 

Alec: [00:02:34] So we should say there is just an epic resource for this that we've posted in the Facebook discussion group a few times. We'll include it in the show notes. It's a savings accounts leaderboard by Techt. There are group that share a whole bunch of financial data. So big shout out to the team there that, putting this data together, because there's a lot of banks out there, there's a lot of options out there. And for them to do the work to make it easy, so good is really appreciated and valuable. 

Bryce: [00:03:06] Well Ren, let's start with the first. Which is the best base rates? No minimum deposit, no required spending, no other gimmicks, no strings attached. This is if you just want a savings account that you can put money in to take it out and not have to worry about anything else to get the savings rate, then this is for you.

Alec: [00:03:22] We'll go for each of them 5 to 1. So. So coming in fifth place, equal fifth, Great Southern Bank eSaver flexi and Move Online Saver paying 4.2%. Not bad for a base rate.

Bryce: [00:03:38] For a base rate, yeah. As we said at the top. So these banks are obviously for convenience. You're I guess losing a little bit of, interest here. But anyway, let's keep going. Macquarie Savings Account 4.75% and ANZ Plus at 4.9, along with Unity Bank, Money Max account also 4.9. 

Alec: [00:03:58] And then finally coming on top of the pops. At 5.1% Australian Unity Freedom Saver 5.1%. Up to 50 grand. 

Bryce: [00:04:09] Okay, so swipe anything over 50 rate drops. 

Alec: [00:04:12] Yeah, yeah. 

Bryce: [00:04:14] So not not bad. As we said, you want a five in front of it. Only one of the banks there is offering, about 5%. And that's Australian Unity Freedom Saver at 5.1%. 

Alec: [00:04:24] My big takeaway from these is ANZ coming to the party. You don't often see the big four banks in these charts. 4.9% is very impressive. And then I think the savings account that gets the most buzz is Macquarie. 

Bryce: [00:04:41] Yeah. Well they're very they do a lot of out-of-home advertising and they really pride themselves on being able to offer that rate. 4.75 no strings attached. 

Alec: [00:04:51] Yeah. They also offer it in their transaction account I think. 

Bryce: [00:04:55] Yeah. 

Alec: [00:04:55] Yeah. Which no other bank is really doing which. 

Bryce: [00:04:58] Is yeah I get why they do it, but yeah, my transaction account is zero. 

Alec: [00:05:04] Yeah yeah yeah yeah. Yeah. Every fortnight. Oh. So it's like. 

Bryce: [00:05:09] Yeah I know. Yeah. It's negligible.

Alec: [00:05:12] My transaction account also just doesn't have a lot of money in it. 

Bryce: [00:05:15] Yeah, yeah. 

Alec: [00:05:15] Because like every fortnight I put what I need and then I try not to have to transfer it.

Bryce: [00:05:20] Yeah. You're not making meaningful interest. 

Alec: [00:05:23] No. But yeah. Look, I know, I know where framing this is. If you don't have a five in front of it, what are you doing? But I think if you're with Macquarie or you're with this ANZ plus account, and that's where you do your banking and you're getting these high fours like that's fine. 

Bryce: [00:05:38] Well if you, if you are specifically looking for no strings attached then this is a perfectly okay option.

Alec: [00:05:44] Yeah. Because the thing especially with Macquarie is like Macquarie, always going to be competitive. And I say I pause as I say that because you know, you know, things might change, priorities might change. But like, right now what they're trying to do is for people that just want peace of mind that they're getting a good rate without having to do anything like Macquarie is trying to attract. And that is a good rate. 

Bryce: [00:06:07] Yeah. Can't complain. Yeah.

Alec: [00:06:08] All right. Let's move to the best honeymoon rates. The second category. Now these are great for people who are willing to do the switch regulation. I'm going to put my hand up and say isn't me. But there is money on the table if you're willing to do it.

Bryce: [00:06:25] So this is if you're a new customer. We have four equal second. 

Alec: [00:06:31] Yeah. Yeah.

Bryce: [00:06:33] Four banks in equal second. All on 5.35%. So we've got the Bank of Melbourne, Maxi Saver, Bank of South Australia, Maxi Saver and Saint George Bank Maxi Saver, all offering 5.35% for the first three months. And then you've got Macquarie coming back in for the party at 5.35 for the first four months, but then the number one for new customers is Rabobank HISA account at 5.75 for the first four months. So if you are willing to uproot and move for a number of months, then you're going to get a pretty juicy rate of 5.75. [

Alec: [00:07:16] So here's something interesting. While I've just, while you've been going through that list. So you mentioned there that Saint George Maxi Saver, Bank S.A, Maxi Saver, Bank of Melbourne, Maxi Saver were all 5.35% for the first three months. And the fact that they were all exactly the same terms and all called Maxi Saver, I was a hold on. What's going on here? All three of those banks owned by Westpac? Yeah, it's just with so many things. It's the illusion of choice. You think you're banking with a non big four and it's like, oh you're actually banking with the big four. But interestingly Westpac are willing to offer that introductory rate for their small subsidiary banks. But you don't see Westpac on this list at all in terms of good honeymoon rates. So it's just like it's some insight into their corporate strategy. I guess the people who are willing to switch are more likely to switch to the smaller banks, because I think they're getting a bit of a rate. 

Bryce: [00:08:10] Yeah a lot of them. Rabo. 

Alec: [00:08:13] Yeah. So you said Rabobank is, oh no Rabo 

Bryce: [00:08:17] Okay, but there are a number of those little ones that have been all scooped up. 

Alec: [00:08:21] Yeah. 

Bryce: [00:08:21] Which is also like Accc. Come on. Is that how this working? 

Alec: [00:08:26] Now that is a bigger question than we are going to cover today. 

Bryce: [00:08:30] Anyway, sSo this isn't for me, right? I'm just saying I'm not on a honeymoon. I'm not a honeymoon right chaser. Because I think the administration involved is not worth okay. I don't think it's worth the additional two percent. And I think that if you can meet some of the hurdles for the best overalls, then you're getting better rates anyway. 

Alec: [00:08:54] Yeah, that's my big thing. Like the way that I've set up my banking, jumping through hoops isn't onerous for me. And so I'm happy to go down that route. And yeah you're right. Like it's negligible the difference. So let's take a quick break here. And then on the other side let's talk about the best overall rates in Australia as of the start of April 2024. And then we'll give an insight into how we think about our savings accounts and how we manage them. Welcome back to Get Started Investing. Today we are talking about the best savings accounts in Australia as of April 2024. And we are asking the question, if your savings account doesn't have a five in front of it, what are you doing? We've covered the best base rates, the best honeymoon rates. But now we're going to the category that all the banks stay up for, compete on to, to achieve, which is the best overall. 

Bryce: [00:09:56] Right. Yeah. So these are the rates where you need to have a minimum deposit or a minimum spend. You often have to have a transaction account attached to it.

Alec: [00:10:03] Well sorry we should be clear. This is just an open category. So except for the honeymoon rates like this is like the best ongoing rate you can find. It's just that everyone who places in this category has the hoops. 

Bryce: [00:10:17] And the hopes are obviously designed for you to put as much money into the bank account as possible and then to also interact with the banks, in multiple ways. So, as I said, in transactions or whatever it may be. So let's start with number five, which is the Virgin Money Boost Saver + Lock saver. They're offering 5.35% if you deposit $1,000 and make five purchases every month. 

Alec: [00:10:41] Nice. Coming in at number four is the AMP Saver account at 5.4%. Their monthly requirement is that you deposit at least $1,000. 

Bryce: [00:10:52] Nice. Coming in at number three is the ING Savings Maximiser plus the Orange Everyday transaction account. They're offering 5.5%. If you deposit $1,000, make five transactions with the everyday account and grow your savings balance each month. Yes.

Alec: [00:11:11] Coming in at equal second with ING is the Move Growth Saver. Also at 5.5%? They ask that you deposit $200 and make no withdrawals each month. 

Bryce: [00:11:25] So that's a real savings account. And then coming in at number one is the Me Bank HomeMe saver + spendMe Transaction account offering 5.55%. The monthly requirement is that you grow your savings balance and deposit $2,000 into the SpendMe account. So multiple accounts there on the go. But 5.55% is currently the best rate anywhere in Australia for a savings account. 

Alec: [00:11:58] Yeah, a lot of these banks who lose money on these savings accounts, but what they want is our spending account. They want us to move our banking over to them. And so that's why they tie these. So that's the best rate as of early April 2024. Now, if you want to keep up to date as these rates change, we'll include the link to the sheet that we used in the show notes or jump across to our Facebook discussion group because we'll, every now and then, share the sheet in there. But Bryce, as we close out this episode, does your savings account have a five in front of it?

Bryce: [00:12:35] Yeah, I've got the number three, third best savings account, the ING savings Maximiser. 

Alec: [00:12:41] No, no, don't sell yourself short. 

Bryce: [00:12:43] It's the second best.

Alec: [00:12:44] Equal second. 

Bryce: [00:12:46] Equal Second. I've got the ING savings Maximiser plus an orange everyday transaction account. So I do all my transactions through that and all of my savings and also joint savings with Harriet go into ING. So it's at 5.5%. The toss up that we're constantly discussing is how we utilise our offset account. Because that's where up until now, I've, I've just been happy with 5.55. I'm not going to chase down Me bank to get the extra 0.5, 0.05% for the 5.55, so I'm happy that it's up there. And ING, to their credit, have always been good at being in that top, top three. So I'm confident that I don't have to keep trying to chase things down. Our mortgage is 6.09%. So again, it's half a percent more than I would be getting in a savings account at this stage though psychologically, like having a separation with some of our savings. Yeah, yeah. And so for us it's we still run both. It's not all eggs in an offset basket. Yeah. Yeah. So again like the argument is yes. That that over a long period of time that half percent does make it up the like we've only got, you know, 4 or 5 grand in our like travel account or whatever. You know, that in an offset. 

Alec: [00:14:07] Yeah. Yeah it does make a huge difference. 

Bryce: [00:14:09] Yeah. Yeah, For us the psychology of it is a little bit more important. 

Alec: [00:14:13] Yeah I'm the same. So I'm a ING savings maximiser. We spoke about it on the show. I got my savings account sorted last year. And that was big for me because I'd been a dolomites comeback kid from as early as I could remember. And, I felt like I was missing out on some of these top rates. And so that's why I made the switch, and it works for me. I do my transactions with the everyday account so I don't find the hoops owners to jump through. I also have the same dilemma about offset the savings account that I like having, and my emergency fund as a separate pool of cash, in my savings account. Just. Yeah. Again. So exactly what you're saying, psychologically, it just it feels like if I do need to draw on it, it's there to be drawn on. Yeah, rather than drawing it out. So it's where it's like. Yeah, that, like that money's kind of accounted for. Yeah. And that's just a psychological thing. And people are probably like, that's stupid. Just maximise your returns. Yeah, but whatever. It's my money. 

Bryce: [00:15:18] As Ren said, will provide all the information so you can have a proper look. The link will be in the show notes to the, to the spreadsheet. And, yeah, if you don't have a five in front of it, there might be a reason, but there are plenty of options out there to suit different styles of how you want to set up savings accounts.

Alec: [00:15:34] Yeah. And if I like at least a 4. 

Bryce: [00:15:37] At least a high 4. 

Alec: [00:15:38] At least a four and a half. 

Bryce: [00:15:39] At least a for at least a 4 1/2. Anyway we'll leave it there. We'll be back next week with some interesting trends and deep dark secrets revealed from a deep dive on our budgets. We'll pick it up next week.