It’s often every week we see on our screens that interest rates are increasing or moving in some way, shape or form.
A lot of us feel the impact of those increases on loans such as mortgages for our homes. These impacts aren’t always negative though, there’s often a silver lining.
When interest rates go up or down for loans, they generally move for savings accounts as well. If you have a mortgage, your repayments increase but so does your return on cash in the bank if you have a savings account.
An example: In November 2022 the OCR (Official cash rate) increased to 4.25%, in reaction ANZ increased their serious saver rate by 0.75% per annum.
What does this all mean?
If you had $20,000 saved today and you were putting away $50 a month with a 2% interest rate return, you would have $25,259 in 5 years time.
Whereas If you had $20,000 saved, put away $50 a month and had a 2.75% interest rate, you’d end up with $26,163 in 5 years time.
An extra $904 without having to do anything!
Having a good interest rate on your savings account can make a world of difference and provides some certainty on what return you’ll get for your money.
Let's look at the top 5 savings accounts with the best returns:
1. Rabobank Premium Saver
Interest rate: 4.25% Per annum
Criteria: Increase you savings account balance by $50 a month compared to the start of the month to get the premium interest rate, otherwise you receive the 2% rate. Balances only up to $100,000. No account fees or minimum balance.
Link: https://www.rabobank.co.nz/premiumsaver/
2. BNZ Rapid Saver
Interest rate: 3.95% Per annum
Criteria: One free withdrawal each bank month, after that each withdrawal costs $3. No account fees.
Link: https://www.bnz.co.nz/personal-banking/everyday-banking/rapid-save#rates-and-fees
3. ANZ Serious Saver
Interest rate: 3.75% Per annum
Criteria: One free withdrawal per month, a charge of $5 applies to each withdrawal. Earn up to 3.75% p.a. interest if you make no withdrawals and deposit $20 or more on or before the last business day of the month. No account fees.
Link: https://www.anz.co.nz/personal/accounts/savings/serious-saver/
4. ASB Saver Plus
Interest rate: 3.55% Per annum
Criteria: One free withdrawal in the first 5 days of each quarter of the year. Balances only up to $2,000,000. No account fees or minimum balances required.
Link: https://www.asb.co.nz/bank-accounts/savings-plus.html
5. Kiwibank Online Call
Interest rate: 3.35% Per annum
Criteria: Free unlimited withdrawals, no limit to account balance. No account fees or minimum balance required.
Link: https://www.kiwibank.co.nz/personal-banking/investments/savings-accounts/online-call/
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Final words
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Disclaimer
This blog or any other information provided by BudgetBuddie is not financial advice. If you're needing financial advice please get in touch with a licensed financial advisor or professional.
