Research the various savings options that are available.

Typical savings products include:
  • Savings accounts
  • Special purpose savings accounts
  • Term deposit accounts

Some features of typical savings accounts are:
  • They allow you take money out when you want (may be subject to daily limits)
  • The interest rates may vary (e.g. some accounts pay very low interest, while some online savings accounts pay relatively high rates)
  • Some may offer benefits (e.g. higher interest, reduced fees) if the balance stays above a minimum amount
  • Day-to-day or transaction accounts can be started with an opening deposit as little as $1
  • Cash management accounts can require an opening deposit of a few thousand dollars but usually pay higher interest (try an online account for high interest with a low initial balance as an alternative)
  • They can be useful for day-to-day transactions and short-term saving (e.g. for bills)

Some features of typical special purpose savings accounts are:
  • They offer incentives to save (e.g. higher interest if regular deposits are made or no money is withdrawn in a particular period)
  • They may be designed to help meet particular goals (e.g. Christmas Club account)

Some features of typical term deposit accounts are:
  • You can't take money out until the end of the term which can range from 30 days to 5 years
  • They tend to have higher interest rates than transaction accounts and the rate is fixed for the duration of the term
  • They can be useful if you've saved a few thousand dollars that you want to keep for a future goal. A term deposit account will prevent you dipping into the money sooner than you had planned and will pay more interest than a savings account
  • The risk with term deposit accounts is that if you need to withdraw the money early you will incur an interest penalty