Deposits in savings accounts are being eroded by inflation as banks continue to slash interest rates - but there are still some savings accounts on the market with good rates. A key component of savings account interest is the base rate.

This article will explain what a base rate is, how it’s different from other savings account rates, and why it’s important to keep your savings interest rate above inflation, which is getting harder to do.

Compare savings accounts with the highest base rate

The table below displays a selection of some of the highest base rates on savings accounts.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
*Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
*Rate varies on savings amount

Save Account (<$100,000)

  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace

Savings Account (Amounts < $250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • For deposit amounts $0 - $49,999
  • New ING personal savings customers receive an introductory bonus 0.50% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
  • Reverts to variable ongoing rate. T&Cs apply.

Savings Accelerator (Amounts < $50000)

  • For deposit amounts $0 - $49,999
  • New ING personal savings customers receive an introductory bonus 0.50% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
  • Reverts to variable ongoing rate. T&Cs apply.
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of August 21, 2024. View disclaimer.

Important Information and Comparison Rate Warning

What is a base interest rate?

A base interest rate is the default interest rate that all account holders will earn on a particular savings account.

According to Savings.com.au’s research, the highest base rate on the market is currently 3.50% p.a. for a children’s savings account, which tend to have higher interest rates than adult savings accounts. The highest base rate for an adult savings account is currently 1.20% p.a, while the average base interest rate for most savings accounts is generally between the 0.50% to 0.80% mark. If you’re a customer of the big four it’s even worse, as the average base rate on savings accounts across the big four banks is just 0.05% p.a at the time of writing.

If that sounds pitifully low it’s because it is. Interest rates on savings accounts have been plunging over the last couple of years thanks to multiple cash rate cuts by the Reserve Bank. Since 2019, the cash rate has been cut six times. As of March 2021, the cash rate is just 0.10%, while the current rate of inflation is 0.90%.

This means that if the total interest rate on your savings account is lower than 0.90% p.a, your money is basically going backwards. Savings that aren’t growing at or above the rate of inflation results in your money essentially decreasing in value over time.

See also: How inflation affects your term deposit and savings account returns.

How are base interest rates different from bonus interest rates?

A bonus interest rate is usually offered on top of the base rate, either as an introductory rate (also known as a honeymoon rate) or as a conditional rate, which you can only earn by meeting certain conditions like:

  • Depositing $X amount of money into your savings account every month

  • Making no or limited withdrawals every month

  • Making a certain number of transactions every month using the linked transaction account

  • Having a linked transaction account with a certain amount of money deposited into it every month

Sometimes you may have to meet a combination of these requirements to earn the bonus rate.

The table below displays a selection of savings accounts with some of the highest bonus rates on the market (age limits may apply).

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
*Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
*Rate varies on savings amount

Save Account (<$100,000)

  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace

Savings Account (Amounts < $250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month

Savings Maximiser (<$100k)

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
More details

Boost Saver

    01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
    More details

    Bonus Saver Account (Amounts < $100k)

      3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
      More details

      Everyday Savings Account

        5000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
        More details

        NetBank Saver

          3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
          More details

          Maxi Saver

            00.010$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
            More details

            Life

              3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
              More details

              Maxi Saver

                010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                More details

                Smart Saver Account ( < $250k)

                  020000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                  More details

                  HomeME Savings Account ($0 - $100,000)

                    3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                    More details

                    Maxi Saver

                      3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                      More details

                      Online Savings Account

                        03000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                        More details

                        Bonus Savings Account

                          4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                          More details

                          iSaver

                            4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                            More details

                            Bonus Saver ($0+)

                              010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                              More details

                              Saver Account (<$250k)

                                02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]
                                More details

                                Bonus Saver (<$1 Million)

                                  Important Information and Comparison Rate Warning

                                  All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of August 21, 2024. View disclaimer.

                                  Important Information and Comparison Rate Warning

                                  Savings.com.au’s two cents

                                  When choosing a savings account, looking for a high base rate is definitely important but it’s not the only thing to look out for. You also want to make sure the savings account doesn’t have any monthly account keeping fees as these will eat into your savings. There are so many savings accounts on the market that don’t have any account keeping fees, so it wouldn’t make sense to choose an account that does.

                                  You should also consider what features you want in a savings account, such as the ability to link multiple sub savings accounts for different savings goals.

                                  Photo by Vanessa Lee on Unsplash