With rates rising, it's time to start paying attention to your savings account

Have you checked in on your savings account lately?

With interest rates on the rise, some banks are now offering accounts paying more than 3.5 per cent interest each year.

If your savings aren't earning a competitive rate, you could be missing out on hundreds of dollars each year — or more if you have a large balance.

"Saving up money is one of the first steps of getting on top of your finances," says Kate Crowhurst, a financial literacy writer and educator based in Canberra.

"If you're giving a bank the trust and permission to use that money, you may as well be earning interest."

Here are some important things to consider when looking for a place for your hard-earned savings.

Look beyond the advertised interest rate

When comparing the rates of different savings accounts, Ms Crowhurst says there are three key things to consider:

1. 1.What is standard interest rate? This is the rate of interest you'll earn just for keeping your money in the account.
2. 2.Is there a bonus rate? Some accounts have a bonus rate for customers that meet certain conditions. For example, your bank might require you to grow your balance each month to earn the bonus rate or make a certain number of transactions from a card linked to your account
3. 3.Is the rate temporary? Some banks also advertise savings accounts with a high introductory rate. While these products can be attractive at first glance, often they revert to lower rates after the introductory period ends, which can lead to you earning less on your money as time goes on.

It's also important to check for monthly fees or transaction fees.

"Some accounts, particularly transaction accounts, do have fees attached," Ms Crowhurst says.

You may, for example, need to deposit a certain amount each month to avoid paying a monthly account fee.

Consider how you'll need to access your savings

Another thing to consider is how easily you'll be able to access your savings.

"Often, when the market changes, we look at the numbers [the interest rate]," Ms Crowhurst explains.

"But often it's useful to look behind that: is it a bank where, for example, it will take several days for you to access your money?

"If you have an emergency account, you may need money if your fridge breaks and you need to buy a new one. You may need to access that money really quickly. "

It's also worth considering the features of the account.

For example, you might prefer to choose a bank that offers real-time payments or a bank that allows you to create multiple savings accounts without extra fees.

"What I like to do — and I don't see this emphasised a lot — is to design a structure that works for your life and goals," Ms Crowhurst says.

"An emergency account is going to be different to an account that's going to be used to save for a house.

"The emergency account needs to be easily accessible and liquid, the savings for a house might be different."

It can pay to switch

Unfortunately, loyalty isn't often reward by banks, so if you haven't shopped around lately, there's a chance that your bank isn't offering you a competitive deal.

It can be a hassle to switch banks, especially if you have an account set up with all your direct debits and payments.

What you might now know is that banks are required to help transfer any direct debits and credits when you switch accounts.

While it's helpful to know this little-known rule, there can be hiccups — so it's worth checking important payments are set up correctly.

Importantly, switching banks can save you money. It's why Ms Crowhurst recommends checking in with your accounts regularly to ensure you're getting a competitive deal.

"Are there new banks popping up or [banks] that are offering better rates that may suit you better now?" she says

"It doesn't have to be something you do all the time, but set aside some time to have a look at what's happening."

This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.