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Where is the best place for my savings


So you’ve managed to pull together some savings. Awesome work! But what comes next? Where do you put it and just how hard should those savings be working for you?

If your plan was to stash your cash under the mattress then there are some things we need to talk about. There are many places you can keep your savings but ideally you want them somewhere where they are earning money for you. And last time we checked; the mattress wasn’t paying up. So, what are your options?

You could keep your savings in a transaction account, but chances are you will earn little to no interest on your savings there. The two most common places to deposit your savings are either an account specifically designed for savings or a term deposit. But how do you choose? Here are some things to consider:

Savings Account

  • In a savings account, you have ready access to your cash. Whilst most savings accounts don’t actually have a cashcard attached to them (this is to help you save rather than spend), a simple internet banking transfer is usually all you need in order to access the money.
  • Your savings account should have a higher interest rate than your transaction account. Depending on the account, you may be able to earn bonus interest for regular deposits or you may have a tiered interest rate structure depending on how much you have in the account.
  • While your savings account interest rate should be higher than your transaction account interest rate, it may not be as high as a rate you might get with a term deposit. It pays to do the research, literally.
  • The interest rate on your savings account is a variable rate and may change at any time.
  • You can increase the amount in your savings account by depositing regularly.

Term Deposit

  • A term deposit offers you a fixed interest rate for a set period of time, so you know what return you will get on your money. Term deposits can be available from terms of 30 days up to 5 years.  
  • The rate offered on your term deposit will not change for the agreed term. So as savings accounts’ interest rates may go up or down, your term deposit rate will remain the same.
  • Interest is usually paid at the end of the agreed term, unless otherwise specified. Some term deposits offer interest payments throughout the term, however you may be offered a reduced interest rate for this option.
  • When you lock your savings into a term deposit, they are locked away for that time. You may face costs to access your savings before the end of the agreed term.
  • A term deposit may have a minimum deposit amount — usually $1000. Interest rates offered may depend on the amount you can invest.
  • You cannot add any further savings to your term deposit throughout your agreed term.


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If you have an offset account attached to your mortgage, consider storing your savings in that account. They won’t earn any interest, but they will save you interest on your home loan. Read more about getting the most out of your offset account here.