Comparing interest rates on bonus saver accounts
Money has been circling around our daily lives, and most times it comes and goes. It can be too quick if we don’t plan and budget it properly. Some people look forward to saving their money by opening savings accounts with their trusted banks. But isn’t it better to have it saved on a platform that offers competitive interest rates? If you’re looking for higher returns compared to the standard savings account, there is a bonus saver account in Australia and other countries that might offer this. And to make the most of these accounts, it’s important to understand the terms they may offer and get into their interest rates and conditions. If you are looking more into this type of saving, stay tuned as we discuss more about it, which might help you with your plans.
Bonus saver accounts
Most banks will give you interest rates, but they are not very competitive for standard savings. Usually, you won’t feel its annual return. On the other hand, a Bonus Saver Account, as the name suggests, will offer a bonus interest rate if a specific criteria is met. It is the type of savings account that will encourage an individual to save more! Why? Because it offers a higher interest rate under certain conditions, they give more incentives for savings compared to the flat interest rates that traditional savings accounts can offer. Such conditions can be regular deposits or no withdrawals for a certain period of time, and your Bonus Saver Account will give you that bonus rate apart from the base rate.
This and that: Key features to compare
Interest rates
- Base rate vs. bonus rate: The base rate is the standard rate for your money applied to your balance; on the other hand, a bonus rate is usually offered when you meet certain conditions, like goals to achieve apart from just saving. A good example of this is when a bank has already allotted a base rate for you of, let’s say, 3.00%. They offer you the goal of depositing a certain or minimum amount per month without withdrawals. Once achieved, they will give you an additional 2% p.a. bonus rate—for a total of 5% p.a.
- Balance tiers: Some accounts may also offer a different rate based on your balance. Once you exceed a certain amount of balance, interest rates may also change or increase.
Conditions for earning bonus interest
- Monthly deposits: As mentioned before, you may check if the bank offers a minimum deposit requirement each month to be able to avail yourself of the bonus rate.
- Withdrawal limits: There are instances where Bonus Saver Accounts might require you not to make any withdrawals to be able to qualify for the bonus rate. It’s like having a time deposit account, if you might say so. So in order not to have complications with your budgeting, make sure that you are comfortable with this kind of setup.
Account fees
- Account keeping fees: Having interest rates looks good with your numbers, but to ensure they are yours, it is best to look for accounts with no monthly fees or account keeping charges. Some banks have these charges, which you might need to look into. If there is no such thing on the account you opened, this will guarantee that all your earnings from your high interest rates are intact.
- Minimum balance requirements: Depending on your financial capacity, you may also look into accounts that require a minimum balance to be able to earn interest or avoid any fees.
Choosing the best account
- Evaluating your financial habits: As previously mentioned, you may be required to have your monthly deposits to be able to attain a certain interest rate for your account. If you can be consistent about it, you may be rewarded with a high bonus interest rate that will surely increase your savings. On the other hand, for some instances where you might need to withdraw your funds, it is best for you to look for a flexible term with regards to your withdrawals.
- Anticipating future changes: If you’ve had accounts already opened by other banks, you might have seen one of their terms that their interest rates and conditions can change with or without notifying you. For a better banking experience, it is recommended to open an account that can offer you stability and, of course, notify you of any term changes.
Conclusion
Comparing interest rates on bonus saver accounts focuses more on your financial habits and understanding the best offers a bank could give you. By considering the factors mentioned, it is always best to review the terms and conditions a bank will offer you and compare them to your financial needs and flexibility requirements. Select an account that is best suited for you, aligns with your savings goals, and maximizes your target returns.
