Where to find the highest rate savings accounts and term deposits?

There is one significant upside to the Reserve Bank of Australia hiking the cash rate: savings account and term deposit rates are on the rise.

For savers that have suffered through near-zero per cent interest rates on their hard-earned nest eggs, a higher interest rate environment means they may finally get a decent return on their savings again.

Today, the Reserve Bank of Australia (RBA) hiked the cash rate in its July meeting by 50 basis points to 1.35%. This follows a 0.25 basis point hike in May and a double-hike of 50 basis points in June.

The total rate hike that savings account and term deposit providers may pass on to their customers is 1.25% by July. However, providers typically pass on these changes to their financial products a few days or weeks after the RBA announcement.

This means that the rates you see below may be the highest today at the time of writing, and they could increase even further as July rolls out.

Savings accounts leaderboard

Some of the highest savings account rates on the RateCity database are reserved for conditional savings accounts. This is a type of account in which you may need to meet certain conditions, such as a minimum deposit amount or no withdrawals, to earn the highest interest rate.

The highest rate savings accounts

Source: RateCity.com.au. Data accurate as of 30.06.2022.

If you’re the type of saver who prefers to set and forget their cash or frequently dips into it a conditional savings account may not be the best suit for your needs.

For comparison, here are how the big four bank savings accounts stack up, for both conditional accounts and standard accounts.

Big four bank goal saver accounts

Source: RateCity.com.au. Data accurate as of 06/07/2022. *New CBA Goal Saver maximum rate effective as of 15th July following July RBA hike. 

Big four bank online savers

Source: RateCity.com.au. Data accurate as of 30.06.2022.

Term deposits leaderboard

After years of cuts to the cash rate, diligent savers haven’t seen the strongest returns for putting their nest eggs in a term deposit. However, thanks to a series of cash rate hikes, term deposit interest rates are starting to become more competitive again.

If you’re currently in the middle of a fixed rate term on your deposit, you are not going to feel the impacts of these cash rate hikes until the term ends. But if you’re in the market for a new term deposit, it’s worth knowing which providers are offering some of the most competitive rates.

The highest rate term deposits ($20k balance)

Source: RateCity.com.au. Based on a $20,000 balance. Data accurate as of 30.06.2022.

Some of the highest term deposit rates are, however, reserved for the longest fixed terms. This is so providers can ensure you keep your cash with them as long as possible, as it ensures you are a customer for several years.

Highest rates regardless of term

Source: RateCity.com.au. Based on a $20,000 balance. Data accurate as of 30.06.2022.

Not all providers passing on hikes

It’s worth keeping in mind that not every bank or provider in Australia has agreed to pass on the cash rate hikes in full to their saver customers.

RateCity research shows that at the end of June, only 37% of banks on the database increased the rate on at least one savings account following the June RBA hike. And just over half (58%) of banks increased rates following the May hike.

If your provider has not agreed to pass on the interest rate hike to you, it may be worth shopping around and comparing your options. Use the savings accounts and term deposit rates listed above as a starting off point and compare options that best suit your needs and budget.

Keep in mind that there is more to a savings account or term deposit than the rate being offered, and it’s crucial you compare fees, features and the provider against your specific needs and budget before applying.

Unlike a home loan or other bigger financial commitments, the process of switching to a new savings account is relatively straightforward and typically takes minutes. For a term deposit, it may be worth waiting until your term ends to avoid costly exit fees. Note in your calendar when your term deposit is coming to an end and start researching competitive options before you are rolled on to another fixed term.

• Not sure if your provider has passed on the rate hike to you yet? Follow our savings account rate hike tracker page today.

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