Making Bonus Saver Accounts Work Smarter
Bonus saver accounts can be a useful tool for clients looking to earn a higher rate of interest on short‑term cash. Typically, these accounts pay a low base rate, with a bonus interest rate applied if certain conditions are met. One common requirement is that you must add funds during the month and avoid reducing the balance, otherwise the bonus interest is forfeited for that period.
Recently, we worked with a client who needed to transfer a sizeable amount from their everyday bank account. This transfer would normally have resulted in a reduction in their bonus saver balance, meaning they would miss out on the bonus interest for the entire month.
Rather than accepting this outcome, we explored an alternative strategy. The client opened a second bonus saver account with the same bank and transferred the majority of their existing balance into the new account. Because the second account began with a fresh balance, it still qualified to earn interest for the remainder of the month. The original bonus saver then received the regular monthly contribution, preserving the bonus interest entitlement.
The result was that the client avoided losing interest and their cash continued to work efficiently. It also reinforced the value of regularly reviewing how savings are structured, particularly when larger transactions are planned. While this may seem like a small adjustment, the compounding impact of retaining bonus interest can be meaningful over time.
Banks design savings products to maximise profitability, and the rules usually work in their favour. Finding legitimate ways to work within those rules, and occasionally feel like the balance has tipped back toward the client, can be quietly satisfying. As advisers, this is where strategy, attention to detail, and good timing can make a real difference for clients.
Craig Kirkwood ADFP
Authorised Representative (No 401525)
