It’s time to demand more of your savings

High-interest savings accounts are a popular choice for Australians who want to make the most of their money.

But savings accounts often come with restrictive conditions. If you don’t meet those conditions, your monthly interest rate can be significantly reduced. That generally means you lose out, but your bank doesn’t.

We’ve put together this guide to help you choose and compare savings accounts that work for you, not just your bank.

Be careful when comparing rates, there’s more than one to consider

If you’re in the market for the best savings account for your financial goals, it’s important to understand the difference between a ‘maximum’ or ‘bonus’ rate, and a ‘base rate.’

Your ‘maximum’ or ‘bonus’ rate generally refers to the highest rate you can earn on your savings account. Often, you need to meet a series of conditions to earn this rate.  

If you don’t meet those conditions, your savings will typically default to a ‘base rate,’ which can be substantially lower than your ‘maximum’ or ‘bonus’ rate.

Conditional interest rates – that is, rates which depend on you meeting specific requirements set by your bank – can make it tricky to compare savings accounts. That’s because it’s difficult to know which months you might not be able to tick all the boxes.

Are these conditions holding back your savings?

Restrictive conditions on savings accounts often mean you’re sacrificing flexibility and access to your own savings. Common conditions on Australian savings accounts include: 

• Monthly minimums: You have to deposit a minimum amount each month.
• Withdrawal restrictions: You can’t withdraw any funds from your account.
• Balance barriers: You have to maintain a minimum balance, or grow your balance each month.
• Compulsory transactions: You need to complete a set number of transactions each month, on a transaction account that is linked to your savings account.

Can you confidently say you can meet each of these conditions, 100% of the time? It might seem manageable, but data suggests otherwise. In fact, a report from the Australian Competition and Consumer Commission (ACCC) found 71% of bonus interest accounts did not receive the bonus interest rate on average each month, over the first six months of 2023.

So, if you’re not regularly receiving your bonus or maximum interest, you’re not alone, and the potential hit to your savings could be significant.

The cost of conditions for Australian savers

Consider the example below. Imagine you could choose either Savings Account One or Savings Account Two to help grow your savings. You have a starting balance of $50,000, and your goal is to deposit $1000 per month.

• Savings Account One: You receive a 4.25% p.a. interest rate – no hoops, no catches.
• Savings Account Two: You receive a 4.80% p.a. interest rate, but only if you deposit $1000 per month, and grow your savings balance. If you don’t meet the conditions, you receive a 0.05% p.a. rate.

If you meet your savings goal 100% of the time – and Savings Account Two’s conditions - you’ll earn more interest from Savings Account Two.

Now imagine you’re taking a holiday, around the middle of the year – you're booking flights, accommodation, and enjoying your hard-earned money while you’re away.

So, for three months out of the year – or 25% of the time - it’s too difficult to deposit a minimum monthly amount and grow your savings balance.  

In that scenario, you’re better off with Savings Account One. That’s because you could earn $369.75 more in interest over a 12-month period, by consistently achieving your rate.

Ask yourself: can I commit to not dipping into my savings? Can I commit to depositing a certain amount each month? And importantly – is it fair that my bank expects this of me?

We think it's time to change the game

At Macquarie, we think you should earn interest on your own terms. In other words, we don’t think it’s fair to penalise savers for needing to access and spend their own money.

"We believe in creating a simpler way for Australians to save,” says Olivia McArdle, Head of Deposits at Macquarie Bank.

“We designed a savings account with a great rate and no deposit conditions, so our customers can be confident in the interest they’re earning each month. Our no hoops, no catches approach reflects our commitment to putting our customers first.”

We also understand that transaction accounts are an essential part of the banking experience for Australians. That's why we offer interest on balances held in transaction accounts, without any deposit conditions.

"It has become normal for savings to be complicated, and we think Australians deserve better. That's why we’ve both designed transaction and savings accounts that deliver real value, with returns our customers can be confident in."

Meet the Australians who are reimagining their savings

1. Conditions can be costly

Many savings accounts offer high 'maximum’ or 'bonus’ interest rates, but these often come with conditions such as minimum monthly deposits, withdrawal restrictions, or balance growth requirements. Failing to meet these conditions could significantly reduce the monthly interest you earn.
 

2. Conditions can control your savings

Savings accounts with conditional interest rates put limits on the freedom and flexibility you have with your own money – and if you fall short, you lose out on savings.
 

3. Your savings game changer

We think there’s a fairer and easier way to save, which is why our savings account has a great rate with no hoops and no catches.