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How to Switch Savings Accounts in Australia

Switching to a better savings rate is one of the highest-return things you can do with an afternoon — there’s no penalty, no credit check, and it’s usually done in minutes. Here’s how to do it without losing a month of interest.

Unlike a mortgage, a savings account has nothing locking you in. The main reason people leave money in a stale account is inertia — and the banks count on it. The single biggest mistake is letting an introductory rate quietly expire onto a base rate that can be under 1% p.a. while your money sits there.

The six steps

1. Check what you're actually earning now

Find your current rate and whether it's a bonus rate with conditions or a flat rate. Many savers quietly drop to a low base rate after an intro period ends — if that's happened, you may be earning a fraction of the headline rate without realising. This is your benchmark to beat.

2. Compare on the rate you'll realistically earn

Don't just chase the biggest advertised number. A 5%+ bonus rate is only worth it if you'll meet the monthly conditions every month. If your income or spending is irregular, a slightly lower no-conditions rate can pay more over a year. Compare both the maximum and the base rate.

3. Open the new account before touching the old one

Opening a savings account online usually takes minutes and needs your ID, tax file number (optional, but without it the bank withholds tax at the top rate), and contact details. Open and verify the new account first, so your money is never sitting somewhere earning nothing.

4. Move your money — and time it around interest

Savings interest is calculated daily and paid monthly, so transfer after your current account pays its monthly interest to avoid leaving a few days unpaid. Use a normal bank transfer (PayID or BSB/account number); there's no formal 'switching service' for savings accounts like there is in some other countries.

5. Redirect deposits and update conditions

If your new account needs a monthly deposit or a set number of card purchases to earn the bonus rate, set those up straight away — redirect your pay or a regular transfer, and start using the linked card if required. Set a calendar reminder for the conditions until they're a habit.

6. Close the old account (or keep it with $0)

Once everything has moved and any final interest has landed, close the old account or leave it empty. Closing avoids dormant-account fees and tidies your finances — but if the old account had a useful feature or a linked offset, keeping it open with a zero balance is fine.

Before you switch

The whole point is to earn more, so make sure the new rate genuinely beats your current one after conditions. Compare current options on our savings account comparison, and read bonus rate conditions explained so you pick an account whose hoops you’ll actually clear each month.

Want to see what the higher rate is worth in dollars? Put your balance and the new rate into the compound interest calculator — over a few years the difference between a stale rate and a sharp one is usually larger than people expect.

Frequently asked questions

Does switching savings accounts hurt my credit score?

No. Opening or closing a deposit savings account is not a credit application and does not appear on your credit file or affect your credit score. Credit enquiries only apply to borrowing products like loans and credit cards.

How often should I switch savings accounts?

There's no fixed rule, but it's worth reviewing your rate every few months — especially when an introductory period ends, since most accounts revert to a much lower ongoing rate. Some savers rotate between intro offers; others prefer a strong no-conditions ongoing rate they can leave alone.

Will I lose interest when I transfer money between accounts?

Savings interest accrues daily and is paid monthly, so you only risk losing the interest for the day or two money is in transit. Transferring just after your current account pays its monthly interest minimises any gap. Transfers between Australian banks are usually same-day or instant via PayID.

Is it safe to have savings at a smaller or online-only bank?

Yes, provided it's an authorised deposit-taking institution (ADI). Deposits up to $250,000 per person per ADI are guaranteed by the federal government under the Financial Claims Scheme — the same protection that applies to the big four banks.

Related guides

Information is general in nature and may change without notice. This is not financial advice — confirm current rates and conditions with each bank before applying.