Savings rates hit decade highs: Australians can now earn close to 6% on cash, but most are leaving money on the table
KOTARA, NSW, Australia – September 03, 2026 – Australian savers are earning the highest returns on cash deposits in more than a decade, with leading savings accounts now advertising rates close to 6 per cent per annum. Newcastle-based accounting and advisory firm 123 Financial Group has published an analysis of the shift, alongside a set of free online calculators that allow households to model how their savings compound over time.
The change follows three consecutive Reserve Bank of Australia cash rate increases in the first half of 2026, which lifted the official rate from 3.60 per cent in February to 4.35 per cent in May. The RBA has held the rate steady at every meeting since, including in August. Deposit rates followed within weeks of each decision, reversing the downward trend that ran through 2025.
Twelve months ago, a competitive savings account with no monthly conditions paid around 4.25 per cent. Leading introductory rates now reach 6.00 per cent for an initial four-month period, top ongoing bonus rates sit near 5.80 per cent, and the best ongoing rate available without conditions is approximately 5.25 per cent. Many default everyday saver accounts continue to pay under 2 per cent.
On a balance of $50,000 with interest compounding monthly, the difference is material. At 5.25 per cent, the account earns approximately $2,689 in the first year, compared with approximately $2,169 at last year’s leading rate of 4.25 per cent. Held for five years at 5.25 per cent, the balance grows to roughly $64,972.
Regular contributions amplify the effect. A starting balance of $10,000 with $500 deposited every month at 5.25 per cent reaches approximately $47,215 after five years, of which about $7,215 is interest. Over ten years, the same plan reaches approximately $95,574, with more than $25,500 earned in interest.
“The gap between a market-leading rate and the default rate on an account opened a decade ago can run to thousands of dollars a year on a meaningful balance,” said Jen Richardson, Founder of 123 Financial Group. “Most people have never sat down and worked out what that gap actually costs them.”
123 Financial Group notes three qualifications on the headline figures. Most leading rates are introductory or bonus rates, and missing a monthly deposit requirement or making a withdrawal can reduce the return to below 1 per cent. Interest is assessable income taxed at the saver’s marginal rate plus the Medicare levy, which reduces a 5.25 per cent gross return to closer to 3.44 per cent for someone on a 34.5 per cent marginal rate. Headline inflation eased to 3.5 per cent in July, leaving even well-placed savers only modestly ahead in real terms.
Savers with a mortgage are also encouraged to compare an offset account before chasing a headline deposit rate, as the effective return there matches the home loan rate and is not taxed.
The firm’s free calculator suite includes a compound interest calculator and an investment growth calculator, which allow users to enter a starting balance, regular contribution, interest rate and time horizon to see how a savings plan compounds.
Links to 123 Financial Group’s calculators, to help households understand how much their savings can grow over time:
Compound Interest Calculator: https://123financialgroup.com.au/compound-interest-calculator/
Investment Growth Calculator: https://123financialgroup.com.au/investment-growth-calculator/
Full calculator suite: https://123financialgroup.com.au/financial-resources/
“People consistently underestimate compounding,” Jen Richardson said. “Seeing the number on a screen is what turns a good intention into an actual plan.”
This release contains general information only. It does not take into account any individual’s objectives, financial situation or needs, and is not financial product advice. Interest rates are variable and subject to change. Calculator results are estimates and do not account for tax, fees or rate changes.
About 123 Financial Group
123 Financial Group is a Newcastle-based accounting, taxation and financial advisory firm that works with individuals, tradies and small to medium businesses across Australia. Founded more than 15 years ago by Jen Richardson and now based in Kotara, NSW, the firm began as a home office practice with a handful of clients and has grown into a full-service team covering accounting and tax, bookkeeping, business advisory and coaching, and finance and lending. Its mission is to make money decisions simple and jargon-free, so clients have the clarity and confidence to build wealth and run businesses that support the life they want. The firm also publishes a suite of free online calculators and financial resources at 123financialgroup.com.au.
Disclaimer
This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.
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Website: https://123financialgroup.com.au/free-financial-calculators/
