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Tips on choosing a bonus interest savings account

If you’re the type of saver who likes to set goals and you are happy to go the extra mile to score them, choosing the right type of savings account can really make a difference. Here are six things to consider when you compare savings accounts that pay bonus interest.

What we’ll cover

  • Minimum monthly deposits
  • Consequences of withdrawals
  • Base interest rates
  • Tiered bonus interest rates
  • Tracking savings goals
  • Monthly and other fees


Image of the Savings Goals feature of a bonus interest savings account.

What to look for in a bonus interest saver account

If you’re a goal saver – that is, you’re a saver with something definite in mind that you’re saving towards – you'll most likely want a savings account to help you reach your goals faster. And that may mean considering an account that earns great interest.

But not all bonus savings accounts are created equal. 

The common feature most bonus interest savings accounts have is that they reward savers with an additional interest rate on top of a base interest rate, provided they meet certain conditions each month. But the bonus rate criteria may vary significantly from account to account, with some making it tougher to earn bonus interest than others.

Add to this the fact that some accounts offer a very low base rate each month should you fail to meet the bonus interest conditions. Plus, some bonus rates may only be introductory rates. Or they may require a minimum balance or regular deposits.

Fortunately, there are some bonus interest savings accounts that won’t make you jump through hoops in order to give your savings a bonus boost. Here are six questions to ask when you compare savings accounts.

How much will I have to deposit each month to earn bonus interest?

Most bonus interest accounts will require you to make at least one deposit a month in order to earn bonus interest, and that can be fairly simple if you're paid monthly into a linked transaction account. But some accounts make it harder by setting a minimum deposit amount – some as high as $200 per month.

Others, however, give greater freedom, requiring just that you grow your balance by the end of the calendar month by any amount compared with the end of the previous month. This is particularly important if you want to start your regular savings small but still want to be rewarded for your effort with bonus interest.


A Westpac Life account for example, will pay bonus interest each month you make a deposit to grow your balance, though there’s no requirement for how much you need to grow it by.

Are there any conditions for making withdrawals?

True, the aim of a bonus interest savings account is to grow your savings, especially when you have something specific in mind, or a target amount you want to reach. But in reality, you may need to dip into your savings, even if you intend to replace the money later in the month.

Does this mean you need to miss out on earning bonus interest? That depends on the account you choose.

Some accounts not only require you to make a minimum monthly deposit to earn bonus interest, they also won’t let you make any withdrawals. 

Fortunately, other accounts give you a break. With a Westpac Life account, provided you’ve grown your balance by the end of the month, you can make as many withdrawals as you like. That's ideal if you need to dip into your savings in the short term but will be able to top them back up within the month.


Does the account offer a competitive base interest rate?

What happens if you haven’t met the bonus interest rate requirements by the end of the month? Unfortunately, with some accounts that means you’ll earn very little on your savings no matter what your balance is.

It’s important then to look for an account that pays a good base rate as well as bonus interest, such as Westpac Life. That way you’ll still be earning interest on your savings whether you’ve made a deposit that month or not. 


Is the bonus interest rate tiered?

Some accounts may showcase an impressive bonus interest rate, but when you get into the detail you find you need to have a whopping great savings balance in order to earn it – even as high in some cases as $250,000. Or they have variable rates according to the balance held.


Fortunately, other bonus interest accounts – such as Westpac Life – will pay the same interest rate on every dollar you have in your account.


Can you track savings goals?

Aside from bonus interest, some savings accounts also come with handy features that could help you keep on track with your savings goals. A goal tracker function can even let you save for different savings goals within the one account, so there’s no need to have multiple savings accounts if you’re saving for more than one thing at a time.

Westpac Life comes with the Savings Goals feature. This allows you to set up to six savings goals, set a date when you want to achieve each goal by, and set up regular transfers to get your savings growing. And you can manage it all in the Westpac App or Online Banking.


By setting up Savings Goals you could establish good savings habits and easily track how you’re progressing.


Are there any fees for opening and maintaining the bonus interest account?

Few bonus interest savings accounts charge fees such as monthly account keeping fees, transaction fees for moving money from an external bank, or fees for when you transfer funds from a linked everyday account with the same bank. However, it's still worth checking the small print before you apply for an account to help avoid any surprises.


In summary

When comparing savings accounts that pay bonus interest, there are a number of factors to consider, including what it takes to earn interest at the rate offered. Many savings accounts with bonus rates give you extra interest, however it's important to check the account conditions and bonus criteria before making a decision. 

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Things you should know


Before making a decision about any of our products or services, please read all the terms and conditions. Fees and charges apply and may change. 
Financial Claims Scheme: payments under the FCS are subject to a limit for each depositor. For more information visit

Total variable interest: total variable interest consists of two parts: Westpac Life variable interest and Spend&Save bonus variable interest. To earn the total variable interest, you must meet the criteria for both parts.

Westpac Life variable interest: includes a standard variable base rate plus a variable bonus rate. To earn the variable bonus interest you must make a deposit to your Westpac Life account, ensure the account balance is higher at the end than the beginning of the month and keep the account balance above $0. Interest is calculated on the daily balance of your Westpac Life account and paid on the last business day of the month.  
Spend&Save bonus variable interest:
  • You must be aged 18-29 with a Westpac Life and a Westpac Choice account – both in the same name. Joint accounts are not eligible.
  • If you have multiple Westpac Life or Choice accounts, only the earliest opened account is eligible.
  • You must make 5 eligible purchases with the debit card linked to your Westpac Choice account and have these settled (not pending) within a calendar month. The following transactions are ineligible: ATM transactions, PayID, BPAY, EFTPOS cash-out only transactions, direct debits and paying off a credit card account.
  • For bonus interest qualification, a month is the period from close of business on the last business day of the prior month to close of business on the last business day of the current month. Bonus interest is calculated on the daily balance of your eligible Westpac Life account up to $30,000, and paid to your eligible Westpac Life account by the 20th day of the following month.
  • If your eligible Westpac Life account is closed before 21st day of the following month, the bonus interest will not be paid.
  • Only one Spend&Save bonus interest offer per customer.
  • Offer may be varied or withdrawn at any time in accordance with the Deposit accounts for Personal customers Terms and Conditions. (PDF 621KB)

1. Bonus interest: You will be eligible for bonus interest if during the month (subject to transaction processing times):
a. your account balance has not fallen below $0; and
b. you (or someone on your behalf) have made a deposit of any amount; and
c. the account balance on the last business day of the month is higher than the account balance on the last business day of the previous month.
Interest paid into your account does not qualify as a deposit in terms of bonus interest eligibility. 
2. Westpac everyday account: To open a Westpac Life or Bump account, customers must hold a Westpac everyday account in the same name and be registered for Online and Phone Banking.  Fees and charges may apply on the everyday account.