Bank savings accounts

An "on call" savings account that allows you ready access to your money in case of an emergency – but rewards you for not dipping into your savings – is best for Christmas saving.

How they work

The easiest way to operate one of these accounts is to set up an automatic payment into it (at least monthly and preferably on pay day). All the accounts we mention here allow you to start saving from your first dollar – they don’t require a minimum deposit. Some will let you set an end-date for the savings you make; many also offer further rewards such as cash and other prizes. Most of these accounts will charge you for each withdrawal.

There are only 2 accounts designed specifically for Christmas saving:

• PSIS’s Christmas Saver Account credits your interest quarterly. You can also ask for the account to be set up with a restriction on ATM/eftpos withdrawals.
• Aotearoa Credit Union’s Christmas Saver Account earns interest monthly, crediting it on 30 November every year. Withdrawals can be made only in December and January.

But there are other accounts you could use for Christmas saving. These 6 pay a bonus interest rate each month if the balance in your account has increased or if you've made no withdrawals:

• ANZ Serious Saver
• BNZ Rapid Save
• Kiwibank Fast Forward Saver
• National Bank eSaver (phone and internet only)
• Westpac Online Bonus Saver (phone and internet only)
• PSIS Step Saver Account.

You may have to pay a fee of $4 or $5 if you make more than one withdrawal per month from these accounts, which is a good incentive to keep to your savings plan.

The next 3 accounts don't pay a bonus rate. But they are their bank's best option for targeted saving:

• ASB FastSaver (phone and internet only). It pays the same rate of interest whether you have made withdrawals or not.
• Rabobank's RaboDirect Savings Account (internet only).
• TSB Saver Plus (this account doesn't earn interest but you automatically go into a monthly draw to win a car). There are no fees for using eftpos or ATMs (its own or other banks') – but that’s not much of a “plus” when you’re aiming to save rather than spend.

In January 2011, the highest rate you could earn on the accounts that pay interest was around 4 percent (including bonus interest rates).

None of these savings accounts charge maintenance or base fees.
 

Upside

• Most of these accounts actively encourage you to save. And automatic payments (if you choose them) force you to.
• Your money earns interest.
• Bank accounts are flexible: you can decide what to spend your money on.
• Your money is readily available for an emergency.
   

Downside

• Interest rates may go down – so an account may not offer as good a deal as a supermarket Christmas club.

Bottom line

These accounts are an easy way to save – and you can save for gifts as well as food. But a Christmas club may give you better value.