Bigger isn’t always better. Just as indie films are often more entertaining than Hollywood blockbusters, challenger lenders often provide better value than big banks.
For proof, take savings accounts and term deposits, where a raft of small banks and credit unions provide more generous interest rates than ANZ, CBA, NAB and Westpac.
Imagine you had $5000 to invest in a savings account. The maximum ongoing rate you could get from a big four bank would be 2.40% with ANZ and NAB.
| Lender | Product | Base rate | Max. rate | How to get max. rate |
| ANZ | Progress Saver | 0.01% | 2.40% | Deposit $10/month; make no withdrawals |
| CBA | GoalSaver | 0.01% | 1.65% | Deposit $200/month; make no withdrawal; keep balance under $50,000 |
| NAB | Reward Saver | 0.50% | 2.40% | Deposit 1c/month; make no withdrawals |
| Westpac | Life | 1.00% | 2.30% | Deposit 1c/month; ensure balance is higher at end of month than start |
However, there are numerous smaller institutions that offer higher interest rates.
For example, Move Bank, UBank, Bank First and ME Bank all offer maximum interest rates of between 2.85% and 2.90%.
| Lender | Product | Base rate | Max. rate | How to get max. rate |
| Move Bank | Bonus Saver | 1.70% | 2.90% | Deposit $200/month; make no withdrawals |
| UBank | USaver with Ultra | 1.81% | 2.87% | Deposit $200/month; keep balance under $200,000 |
| Bank First | Bonus Saver | 0.05% | 2.85% | Deposit $1/month; make no withdrawals; keep balance under $150,000 |
| ME Bank | Online Savings Account | 1.30% | 2.85% | Make one weekly tap-and-go payment with Everyday Transaction Account debit card; keep balance under $250,000 |
Compare Australian savings accounts
If you wanted to invest the $5,000 in a three-year term deposit, there is a similar interest rate gap between the big four banks and challenger lenders.
The big four banks are paying anywhere from 1.75% to 2.60% on three-year term deposits.
| Lender | Interest rate |
| ANZ | 1.75% |
| CBA | 1.90% |
| NAB | 2.60% |
| Westpac | 2.40% |
However, there are plenty of smaller institutions that can top that, with three-year term deposit rates climbing as high as 3%.
| Lender | Interest rate |
| The Mutual | 3.00% |
| Teachers Mutual Bank | 3.00% |
| Australian Unity | 3.00% |
| Bank Australia | 3.00% |
Compare Australian term deposits
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