Savings accounts have lost their charm over the years. I remember when I was still in school, my then Commonwealth Bank account was spitting out around 6% return.
How times have changed. Since just after the GFC, savings account rates have been on the decline. A return of around 2-3% is now the norm.
This has heavily hurt savers, particularly those who lived off the interest rate payments. Many have been forced to transfer their savings into riskier investments like shares and property to achieve the same return on their money.
While savings accounts definitely don't pay as much interest as they used to, it is still important to have a stash of cash available that is easily accessible on short notice. You might as well get a good interest rate on it while it is sitting there.
The vast majority of Australians (myself included) have a bank account with one of Australia's 'Big 4' banks; Commonwealth bank, National Australia Bank, ANZ, and Westpac. But interestingly, these banks rarely offer the best rate you can get.
We will explore three alternative banks that you can park your money in. Note that all of these banks require you to open an 'Everyday Transaction Account' in addition to the 'Savings Account'*. You will also need to meet certain conditions to get the bonus interest rate, however these are usually pretty easy.