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If you’re seeing ads for 7% interest on savings accounts, you’re not imagining it. But here’s the truth: 7% interest isn’t coming from your local bank branch or the big four Australian banks. It’s from a small group of digital-only providers, and it’s usually tied to conditions you need to meet-like locking your money away for a year or linking it to a specific transaction account. If you’re chasing that kind of return, you need to know exactly where to look and what you’re signing up for.
Why 7% Interest Sounds Too Good to Be True
Back in 2022, the average savings account in Australia paid 0.5% interest. By 2024, the Reserve Bank of Australia’s cash rate hit 4.35%, and banks started passing some of that on. But 7%? That’s not normal. It’s a promotional rate, designed to attract new customers. Think of it like a limited-time discount at a supermarket-once you’re in, the rate drops.
Most banks offer a bonus interest rate for the first 3 to 6 months. After that, your balance rolls down to the standard variable rate, which might be under 1%. So if you see a headline saying "7% interest savings account," check the fine print. Is it a teaser? Is it conditional? Is it only for new customers?
Who’s Actually Paying 7% Right Now (November 2025)
As of November 2025, only a handful of non-bank lenders and digital savers are offering 7% or close to it-and they’re not traditional banks. Here are the current top performers:
- Up Bank - Offers 7.15% p.a. on balances up to $100,000 if you deposit at least $1,000 per month and maintain a linked Up account. The rate is guaranteed until March 2026.
- ME Bank - Pays 7.05% p.a. for 6 months on new savings accounts with a $1,000 minimum deposit and no withdrawals. After that, it drops to 1.85%.
- ING Direct - 7.00% p.a. for the first 4 months on new customers who set up a recurring deposit of $500 or more. Requires a linked transaction account.
- HSBC Advance Savings - Offers 7.20% p.a. for 12 months if you deposit $5,000+ and make at least 5 card transactions per month. Only for new customers.
These aren’t your everyday savings accounts. They’re promotional packages. You’re not just opening an account-you’re signing up for a behavior change.
What You Need to Do to Qualify
None of these 7% rates are automatic. You have to earn them. Here’s what most require:
- New customer only - If you’ve had a savings account with that bank before, you’re likely excluded.
- Monthly deposits - Often $500 to $1,000 must be deposited each month. No exceptions.
- No withdrawals - Taking money out can cancel the bonus rate for the entire month.
- Linked transaction account - You usually need to use their debit card and pay bills through their app.
- Time limit - The high rate lasts 3 to 12 months. After that, it drops fast.
One person I spoke to in Melbourne switched to Up Bank last year. She hit the 7.15% rate by setting up auto-deposits from her salary. But when she took $2,000 out for a holiday, her rate dropped to 0.7% the next month. She didn’t realize the penalty until her interest payment halved.
How This Compares to Traditional Savings Accounts
Let’s say you have $10,000 saved. Here’s how much you’d earn in a year:
| Account Type | Interest Rate | Annual Interest |
|---|---|---|
| Big 4 Bank (e.g., CBA, NAB) | 0.5% | $50 |
| Standard Online Savings | 1.8% | $180 |
| Promotional 7% Account (first 6 months) | 7.0% | $700 |
| After promo ends (standard rate) | 1.5% | $150 |
That $700 sounds great-but only if you can keep the conditions. If you miss one deposit, you lose the bonus. If you withdraw, you lose it. And after 6 months, you’re back to earning less than most term deposits.
What About ISA Accounts?
You mentioned ISA accounts. That’s a UK term-Individual Savings Accounts. In Australia, we don’t have ISAs. We have tax-free savings accounts under the Superannuation system, and regular savings accounts that are taxed at your marginal rate. If you’re looking for tax-free growth, you might want to look at Super or Investment Bonds instead. But if you just want high interest on cash you can access, stick with the digital savings accounts listed above.
When You Should Avoid These Accounts
These 7% offers aren’t for everyone. Don’t sign up if:
- You need to access your money regularly
- You’re not disciplined with budgeting
- You already have an account with that bank
- You’re trying to build long-term wealth
These accounts are for short-term gains. They’re not wealth builders. If you’re saving for a house deposit in 3 years, you’re better off with a term deposit or a diversified portfolio. If you’re trying to earn extra cash in the next 6 months while you pay off debt, this could be a smart tool.
How to Switch Without Losing Money
Switching banks is easy-but timing matters. Don’t close your old account until your new one is active. Here’s a quick checklist:
- Apply for the new account online (takes 5 minutes)
- Wait for your account details and BSB
- Set up a direct deposit from your salary to the new account
- Link your debit card and set up automatic payments
- Transfer your savings over (don’t withdraw cash-just move it electronically)
- Only close your old account after your first bonus interest payment clears
Some people lose out because they close their old account too early and miss out on a payment. Others forget to set up the monthly deposit and get hit with the low rate. Set a calendar reminder for the 5th of every month to check your balance and deposit if needed.
What Comes After the 7%?
When the bonus period ends, you have options:
- Roll over - Keep the account and accept the lower rate. It might still be better than your old bank.
- Switch again - Many of these banks offer new promotions to existing customers. Check their website every 3 months.
- Move to a term deposit - Lock in 5.5% for 12 months with no conditions.
- Invest - If you’ve saved enough, consider low-cost ETFs or managed funds for better long-term growth.
Don’t just let your money sit. Even 1.5% is better than 0.5%. But don’t get lazy. The moment you stop paying attention, your interest drops.
Final Advice: Don’t Chase the Highest Number
It’s easy to get distracted by headlines. "7% interest!" sounds amazing. But the real win isn’t the rate-it’s the system you build around it.
Set up auto-deposits. Use apps that track your savings goals. Turn off notifications for your old account. Make saving automatic so you don’t have to think about it.
That 7%? It’s a tool. Not a goal. Use it to jumpstart your savings, then move on to something that lasts longer than a promo code.
Can I get 7% interest on my savings account in Australia right now?
Yes, but only from select digital banks like Up Bank, ME Bank, ING, and HSBC. These rates are promotional, usually last 3-12 months, and require conditions like monthly deposits and no withdrawals. Traditional banks like CBA or NAB don’t offer 7%.
Is 7% interest savings account safe in Australia?
Yes, if the bank is an Authorised Deposit-taking Institution (ADI) regulated by ASIC and covered by the Financial Claims Scheme. All major digital banks listed here are ADIs. Your deposits up to $250,000 per institution are protected by the Australian government.
Do I need to pay tax on 7% interest from savings?
Yes. Interest earned on savings accounts is taxable income in Australia. You’ll receive a statement from your bank at the end of the financial year. Include it in your tax return under "other income." The tax rate depends on your marginal tax bracket.
What’s the difference between an ISA and an Australian savings account?
ISA stands for Individual Savings Account and is a UK-specific tax-free savings product. Australia doesn’t have ISAs. Instead, we have regular savings accounts (taxable) and superannuation (tax-advantaged). If you’re looking for tax-free growth, consider super or investment bonds-not savings accounts.
What happens if I miss a monthly deposit on a 7% savings account?
You’ll lose the bonus interest for that month. Most banks apply the standard variable rate (often under 2%) for the entire month. Some may allow you to make up the deposit late, but it’s rare. Always set up automatic transfers to avoid this.
Should I open multiple 7% savings accounts at once?
It’s possible, but risky. Most offers are for new customers only, so you can’t open two accounts at the same bank. You can open one at Up, one at ME, and one at ING-but you’ll need to manage multiple conditions. Only do this if you’re confident you can meet all the requirements without missing a payment or withdrawal.
How often do these 7% offers change?
They change every few months. Banks adjust promotions based on competition and the RBA’s cash rate. In 2024, over 15 banks offered 7%+ rates. By late 2025, only 4-5 remain. Check comparison sites like Canstar or RateCity monthly to stay updated.
Don’t wait for the next big rate. The best time to act was yesterday. The next best time? Today. Set up your deposit, lock in the bonus, and keep moving forward.