How to improve your budget with the right savings account

Have you been budgeting, but not making much progress when it comes to growing your cash? It could be that your current savings account isn’t offering you a high enough interest rate.

Let’s consider what type of savers are on offer. 

Comparing savings accounts

It can be difficult to tell if you’ve got a good savings account relative to the rest of the market. Thankfully, that’s where the database at Mozo can come in handy.

We track over 200 savings accounts and, by crunching the numbers, have found the averages across a bunch of savings categories. 

* Personal account of $10,000, correct as of 25 January 2024

You can see here that the type of savings product you select does matter, especially when it comes to the rate of interest you get. More on that in a minute.

How different rates affect your budgeting goals

One aspect of a successful budget or savings plan is proper goal setting—even if it’s as simple as building an emergency fund. Depending on the time frame, higher or lower savings rates can change how quickly you can finish a goal. 

One way you can get an idea of how quickly you’ll achieve your goal is with a savings account calculator. With some very basic info, this is an easy way to measure how your savings can grow over time.

Compound interest is another aspect of savings account interest rates that can help you achieve your budgeting goals faster. Essentially, this is when you are earning interest on your interest. By its nature, though, it works better for longer term goals.  

Does the kind of savings account matter?

Yes, depending on the goal of your budget, it can matter what kind of savings account you get. For instance, a short term goal may be better suited to an introductory rate account. Intro rate accounts usually offer high rates for periods of 3 to 6 months before reverting to a base (much lower) rate. 

If you have a longer term goal for your budget, then a high interest savings account like a bonus rate may be the better option. This is because bonus rate accounts usually require no withdrawals (or a balance growth), meaning that they’re better suited for cash that doesn’t need to be accessed right away. 

Also, unlike a term deposit which will only let you contribute more at maturity, a bonus rate savings account can be deposited into whenever you have the cash to spare.

If you’re keen to explore savings accounts some more and find the best one to suit your needs, why not start comparing the top savers below.