Customers can lock away portions of funds in their savings account and receive a 35 basis point premium on the regular savings account's interest rate, bringing the total interest to 1.35% p.a. when bundled with a Boost Saver account.

This is provided monthly criteria is met - including depositing at least $2,000 into the linked Go transaction account, and making at least five settled transactions.

The new feature essentially means customers can turn their savings account into a mini term deposit.

To access their money again, customers must give 32 days' notice, which begins as soon as they hit the unlocking feature in the Virgin Money app.

Customers can lock away their money for up to five years.

Virgin Money CEO Greg Boyle said this is an innovative feature for savers.

"Customers will be able to switch the feature on and off entirely through the mobile app without the hassle of opening or closing an account," Mr Boyle said.

"We’re meeting real, unmet needs, and that excites me. It’s also the latest piece in delivering on what we know our customers, and more broadly Australians want."

Customers can lock away savings in one or more of up to nine Grow Saver or Boost Saver accounts up to the value of $250,000.

They can also continue to grow their savings while it's locked. 

"There’s also a huge benefit in having multiple accounts, because we know customers want to lock away money for a long-term savings goal like a home, but also keep other savings accessible for more short-term goals or emergency funds," he said.

Mr Boyle also said the locking feature might suit a younger crowd.

"We know it’ll be extra appealing to millennials and Gen X who are not typically drawn to traditional term deposits, but instead want a simple, fast and flexible way to put money safely aside to save for something special," he said.

Chasing interest rates amid an impending RBA hike?

All of the big four banks and their teams of economists have pencilled in May or June for an RBA cash rate hike.

Today Westpac chief economist Bill Evans forecast the RBA will hike at next week's monetary policy meeting by 15 basis points, followed by a further 25 basis point hike in June.

AMP Capital chief economist Dr Shane Oliver called on the central bank to be aggressive and hike by 40 basis points next week instead.

Many term deposit rates have already moved sharply upwards, however thus far savings accounts have hemmed and hawed. 

Just this morning Judo Bank increased its at-maturity 5 year term deposit by 60 basis points to 3.75% p.a.

This is already nearly double the rate it was about six weeks ago.

All of this begs the question: Should savers lock away money now or wait to see what happens after the RBA hikes the cash rate?

Many banks will not hesitate to pass on the rate hike to mortgages in full, but it remains to be seen what could happen to deposit rates.

See Also: What happened last time the RBA hiked the cash rate?


Advertisement

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

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
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 $500,000.
  • Reverts to variable ongoing rate. T&Cs apply.
000$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 $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
010000$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
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

Head image supplied