Everyone saves money differently. Some set aside a percentage of their pay regularly, others use lump sums from bonuses or tax refunds. The secret to reaching your savings goal is to choose the right account, understand how to use it and form a habit of saving regularly. Here are our tips to help you on your way.
Have a savings goal and budget
It's much easier to be a good saver if you have some sort of goal in mind. Whether it's a holiday, a house deposit or just saving for a rainy day, have an amount in mind.
To help you work out what that savings goal amount is, you should be realistic about what you can afford to save each week, fortnight or month. A well-planned budget will get you started on your savings path. Check out Budgeting 101 and Budgeting 102 for handy tips.
Earn your bonus interest
Good savings habits can reward you with bonus interest on some accounts. Be disciplined and it will pay off in the long run by helping you save a little faster.
How it works
With accounts like NAB Reward Saver, you get bonus interest each month if you make no withdrawals and at least one deposit each month. Then, if you follow those simple rules, you’ll receive your regular interest plus your bonus interest at the end of the month.
Let’s say in month one you’ve saved $4,000 and your interest rate is 2.50% per annum. Then that month you’ll earn approximately $8 in interest. Your bonus interest varies from different accounts—some need a minimum monthly deposit, some no withdrawals, and some are clause-free (check the account details before you open the account). For this example, we’ll assume there are no clauses and your bonus interest is 0.90% per annum. So for month one your bonus interest will be $3.
Every month, you’ll see your interest and bonus interest (if you stick to the conditions) increase along with your savings. Think of your interest as free money. Eleven dollars might not sound like much, but at the end of 12 months you may have earned an extra $130.
Set up a regular payment
Do you get your phone or power bill direct debited from your account? Well you can apply the same concept to your savings account. Each pay day you're going to make a regular automatic payment into your savings account.
It’s best to make your payment early in the month, because transfers could take a few days to reach your account. You don’t want to risk losing your bonus interest.
Compare our savings accounts
You compare insurance and mobile phone plans for the best deals and options for your needs, the same should be done with your savings accounts.
How do you decide on a savings account? You need to think about your needs and whether you want access to your savings anytime, or if you’d prefer to have a longer-term savings plan.
Think about whether you want an 'at call' account to put your savings into or let it grow for a set term. An ‘at call’ account means you can access the money anytime without fees or economic cost, but you might lose bonus interest for any withdrawals you make.
A term deposit means you put your money away for a longer term (months or years) and receive a fixed interest rate. The interest rate is usually based on the amount and length of time you put the money away for. This is fine if you don’t need access to the money during the fixed term. If you need to withdraw the money before the fixed term is up, you may be charged economic costs.
Track your savings goal
The final secret to successful saving is to keep track of your savings goal. You can use our online budgeting and savings tool, NAB Money Tracker, through your NAB Internet Banking. It can help you set up your savings plan in the first place and then help you keep focused by tracking how your savings are growing.