New highest savings account rate hits 4.90% for young adults: how much you could save?

After years of rock-bottom interest rates, savers are finally seeing decent interest rates put on the table by market-leading providers. A new high interest rate on a savings account for young adults is set to blow many out of the water by hitting nearly 5% as of Thursday. 

Bank Of Queensland has revealed it will hike its myBOQ Future Saver account to 4.90%, effective Thursday 23 February. 

This interest rate is applicable to all balances up to $50,000, and only available for applicants aged 14-35. To be eligible for this higher rate, you will need to meet conditions, including depositing $1,000 into a linked Everyday Account (such as your income), and make five eligible transactions. 

This savings account is designed to help younger Australians save for life’s big goals, such as a first car or a home deposit.  

This interest rate offering of 4.90% will be the highest on the RateCity database when it comes into effect. If the two or three additional cash rate hikes that have been predicted for this year by the big four banks come true, it is very likely that we will see savings accounts above 5% in 2023. 

All Bank of Queensland savings account rate hikes, effective Thursday 23 February:

• Future Saver will increase by 0.15% p.a. To 4.90% p.a. for balances up to $50,000, ages 14-35.
• Smart Saver will increase by 0.25% p.a. to 4.25% p.a. for balances between $1 and $250,000.  
• Simple Saver 4 month Introductory Special by 0.15% for a total rate of 4.25% p.a. for balances up to $5 million.

High interest savings accounts for all adults

It’s not just younger Australians that are able to earn higher interest rates on their savings accounts than before the cash rate hikes began in May 2022. If you’re looking for a savings account with a rate near 5%, look no further than the following accounts: 

High interest conditional savings accounts for all adults

Source: RateCity.com.au. Data accurate 17/02/2023

Generally speaking, some of the highest savings account interest rates can be reserved for conditional savings accounts. These are accounts that, as the name suggests, come with some requirements that must be met to earn the higher rate. 

Be sure that you can meet any conditions associated with higher-earning savings accounts before you consider applying, otherwise you may revert to a lower variable rate.

How much could you save with a high interest rate savings account?

It’s never been more important to shop around to make sure you’re earning a competitive rate on your savings account. Particularly as some ongoing savings rates offered by the big four banks are still below 1%.

A good rule of thumb is to consider choosing a savings account earning a higher rate than inflation so that your nest egg does not depreciate in value. In a high inflation environment where this may be impossible, doing your research around which account comes closest to this rate is even more vital. 

RateCity crunched the numbers, and if you deposited $30,000 into a savings account earning 4.90% in interest, even if you made no additional deposits in just one year, your balance may grow by $1,506. 

Source: RateCity.com.au. Based on an initial balance of $30,000 with no additional deposits. Based on an interest rate of 4.90% p.a. Assumes all conditions are met and no rate fluctuations occur. 

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