While the stock market is falling and the RBA continually cuts the cash rate, savings accounts and term deposits are going up.If you’re looking for a safe place to keep your cash at the moment while still earning a decent return, you’re in luck. We’ve seen a few savings accounts and term deposits increase their interest rates over the past few weeks. This follows 12 months of savings accounts cutting their rates in response to the RBA cash rate cuts.The AMP Saver Account has today lifted its total bonus interest rate from 2.11% p.a. up to a market-leading 2.65% p.a. This is a huge jump of 54 basis points, which is something we haven’t seen in a very long time. AMP also increased the introductory period that this bonus rate applies from four months up to six months, and increased the maximum balance from $250,000 up to $500,000. This means that you’ll earn more interest, for longer, on a larger balance.There’s no deposit conditions in place to earn this rate for six months, either. However after the six month introductory period the rate drops down to the standard variable interest rate of 1.05% p.a.The only other savings account in the Finder database with a savings rate this high is the Macquarie Bank Savings Account. This account also offers bonus interest of 2.65% p.a., however you’ll only earn this for four months in comparison to six with AMP. Although, after the four month introductory period is up you’ll earn an ongoing standard rate of 1.35% p.a. with MAcquarie, which is higher than AMP’s standard ongoing rate.Term deposits rates are going up, tooWe’ve also seen several term deposits lift their fixed interest rates over the past couple of weeks: The benefit of a term deposit is the rate is fixed, so it won’t change for the life of the term. Savings accounts offer variable rates which can change at any time. And with another potential RBA cash rate cut in April, we’ll likely see some savings account rates drop.However there’s a few reasons why you might opt for a savings account over a term deposit. The more obvious is the rate: you can get a higher interest rate with a bonus savings account. Another benefit if that you can access the money at any time if you need to, whereas term deposits are locked until the term reaches maturity.We’re not sure why we’re suddenly seeing interest rates on deposit products go up. But with the stock market still extremely volatile and ongoing fears that the coronavirus pandemic could spark a global recession, a savings account or term deposit could offer a good safety net for your cash. Compare your options to see if you’re getting a good deal with your current savings account.
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