Your Savings Account Just Got a Raise: 5 Ways to Make Higher Rates Work

The RBA's second consecutive rate hike has pushed the cash rate to 4.10%, and while borrowers are feeling the squeeze, savers just got a meaningful pay rise.

Banks have responded fast. As of last week, savings account rates across the big four and challenger banks have jumped by up to 0.25%, with the best accounts now paying well above 5%.

What's actually on offer right now

The standout rates depend on what you're willing to do, and how long you need the rate to last.

For a short-term boost, Rabobank's High Interest Savings Account is paying 5.65% for the first four months on balances up to $250,000. It's an introductory rate for new customers that reverts to 3.95%, but it's the highest savings rate in Australia right now. ING's Savings Accelerator matches it at 5.65%, though note ING is overhauling the product from May with a new stepped rate structure.

If you're 18 to 34, Westpac's Life account with Spend&Save pays 5.50%, but you'll need to make 20+ card purchases a month and grow your balance.

If conditions aren't your thing, Macquarie Bank's Savings Account pays 4.75% ongoing with zero hoops: no minimum deposits, no spending requirements, no age restrictions. New customers get 5.10% for the first four months.

For those who can lock money away, term deposits from several providers are paying up to 5.60%.

But here's the thing most people miss

These rates only work if your money is actually in the right account. The average savings rate across Australia is still well below 2%. That means millions of Australians have cash sitting in transaction accounts or old savings accounts earning almost nothing, while better options are paying three or four times more.

Switching takes about 15 minutes. For $20,000 in savings, moving from a 1% account to a 5% account puts an extra $800 a year in your pocket. For $50,000, it's $2,000.

5 ways to make the most of it

1. Audit your accounts this week. Check what rate your savings are actually earning, not the headline rate, the rate you're getting. Many bonus saver accounts require monthly conditions that are easy to miss.

2. Consider splitting your savings. Keep your everyday spending in a transaction account and your emergency fund in a high-interest saver. If you have a larger balance you won't need for 6 to 12 months, a term deposit locks in today's rates.

3. Automate your deposits. Most bonus saver accounts require a minimum monthly deposit (usually $100 to $1,000). Set up an automatic transfer on payday so you never miss the bonus.

4. Use higher rates to accelerate debt. If you have both savings and personal debt, the maths usually says pay down the debt first. A credit card charging 20% costs you far more than a savings account paying 5% earns you. But if your debt is on a low fixed rate, the savings account might genuinely be the smarter move.

5. Don't chase introductory rates forever. Intro rates (typically 4 to 5 months) are great for a short-term boost, but the ongoing rate is what matters long term. Look at what the account reverts to before you sign up.

The bigger picture

Rate hikes are painful for borrowers. But they're one of the few moments where savers get a real advantage. The gap between the best and worst savings rates is wider than it's been in years, and the difference compounds over time.

If your money isn't working as hard as it could be, this is the week to move it.

Update, September 2026: the Reserve Bank raised the cash rate again on 5 May 2026, to 4.35 per cent, and left it there at its June and August meetings. The savings rates below are as at 30 March 2026.

This article is general information only and is not financial advice.