Get More Out of Your Money With These High-Interest Savings Accounts

Get More Out of Your Money With These High-Interest Savings Accounts
Contributor: Mia Steiber
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The Reserve Bank of Australia defied expectations this month by hiking the cash rate to 3.85%, including forecasting by the big four banks. Homeowners struggling to keep up with mortgage repayment increases may be considering refinancing to a lower-rate lender. With many interest rates on home loans now climbing towards 6%, you may be wondering which lenders are still offering rock-bottom rates. However, it’s not all bad news when the cash rate goes up. Savers may be jumping for joy to see interest rates on term deposits and savings accounts soaring towards 5% and above.

Let’s explore some of the most competitive interest rates for homeowners and savers in May 2023.

Lowest home loan interest rates

RateCity research shows that this latest cash rate hike means homeowners with a loan balance of $750,000 could be paying $1,587 more in mortgage payments than they were in April last year. That is the equivalent of paying for a flight to the USA, or buying a Macbook Air, every single month.

One option available to get your mortgage back under control is to consider refinancing. Switching to a lower-rate lender could allow you to give yourself an interest rate cut, and gain some much-needed breathing room in your budget.

Comparing your refinancing options is one of the easiest ways to ensure you’re nabbing the best deal for your needs and budget. Be sure to look at the comparison rate, fees and features, as well as the interest rate advertised.

To help you with your comparison, RateCity has compiled a list of some of the lowest variable interest rates for both owner-occupiers and investors paying principal and interest. Note that some of these rates come into effect later in May as they came in response to this month’s cash rate increase.

Lowest variable mortgage rates for owner-occupiers (principal and interest)

Lender Rate Comparison rate Effective data
Greater Bank 5.09% 5.10%
Mortgage House 5.14% 5.18%
Qudos Bank 5.24% 5.24% effective 18th May
bcu 5.34% 5.35% effective 17th May
RACQ 5.34% 5.34% effective 16th May

Source: RateCity.com.au. Data accurate as of 15/05/2023.

Lowest variable mortgage rates for investors (principal and interest)

Lender Rate Comparison Rate Effective Date
Bank Australia 5.54% 5.59% effective 17th May
Macquarie Bank 5.54% 5.56%
RACQ Bank 5.64% 5.64% effective 16th May
bcu 5.69% 5.70% effective 17th May
Qudos Bank 5.74% 5.74% effective 18th May

Source: RateCity.com.au. Data accurate as of 15/05/2023.

Keep in mind that there are benefits and risks to refinancing that are worth considering before you apply for a new home loan.

Highest term deposit interest rates

If you’re looking to lock in your savings at a fixed rate, or if your current deposit term is coming to maturity, you’re likely in a better interest rate position than last year.

The highest interest rates on term deposits are now sitting around 4-5%, so it’s worthwhile to shop around and compare higher-rate options.

These are some of the highest interest rates on 3-year term deposits, according to the RateCity database.

High interest rate term deposits

Provider Rate
Judo Bank 4.90%
Qudos Bank 4.65%
AMP Bank 4.65%
BankVic 4.50%
G&C Mutual 4.50%

Source: RateCity.com.au. Data accurate as of 15/05/2023.

Highest ongoing savings account rates

Savers are once again seeing interest rates starting with a ‘5’ on their accounts thanks to the 11 hikes to the cash rate since April 2022.

After years of near-zero interest rates, this is welcome news for those trying to save for anything from a holiday to their first home deposit. However, not every savings account has seen rates rise in tandem with the cash rate. Savers that have been complacent may still be stuck on rates that start with ‘1’.

Within one big four bank, there’s a 3.90% difference between its highest and lowest savings rates. On a $20,000 balance, that’s a difference of earning around $800 in just one year.

In a rising rate environment, it’s crucial that you shop around and compare your savings options. The last thing you want to do is be stung with a loyalty tax by your childhood bank and miss out on a higher return on your savings.

These are some of the highest interest rates on savings accounts, according to the RateCity database.

High interest rate savings accounts

(excludes kids’ accounts)

Account Max rate Balance for max rate
BOQ Future Saver (ages 14-35) 5.30% $50,000
ING Savings Maximiser 5.25% $100,000
Virgin Money Boost Saver 5.10% $250,000
MOVE Bank Growth Saver 5.00% $25,000
Police Bank U30 Super Charge (ages 18-29) 5.00% $10,000
Westpac Spend&Save (ages 18-29) 5.00% $30,000
Great Southern Bank Goal Saver (ages 18-24) 4.85% $50,000
AMP Bank Saver 4.80% $250,000

Source: RateCity.com.au. Data accurate as of 15/05/2023.


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