Reliable returns fuel savings accounts renaissance

With banks "desperate" for funds, Australians can take advantage of a number of good deals on savings accounts to get rates of up to nine per cent, it has been claimed.

According to the Sunday Mail, term deposits were once the saving vehicle of choice - solid and dependable, they locked away cash for a fixed period so it could not be frittered away.

However, over the years such savings accounts fell out of fashion and as more people chose to invest in the stock markets, banks too began to "neglect" their savings deals, the newspaper added.

But with the credit crunch constricting banks' access to liquidity and the share markets becoming a volatile roller-coaster, the humble savings account is making a comeback, it said - and competition for the "retail deposit dollar" means there are now a number of more flexible, fee-free accounts to choose from.

Term deposits are still available and all the major banks and credit unions now offer rates of at least eight per cent for one and two-year deals, the publication noted. Best of all, term savings accounts do not usually have any fees.

A more recent development is the online savings account, which has been available in Australia since 2005.

The newspaper said all the major banks now have online savings accounts available and some offer high interest rates.

This type of savings account tends to be more flexible and they can be accessed at any time to add money or take funds out. However, like term accounts, they also generally come with zero fees.

Although some analysts advise against pulling out of stocks during a downturn, others believe the market for savings accounts has never been better.

Peter Arnold of finance research firm Cannex told the paper: "These are the best returns I have seen from deposit products ever."

Australia's best savings accounts compared and reviewed.

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