In this hustle and bustle world of work, paying off the mortgage, raising the kids and trying to preserve some kind of lifestyle, we often forget about one of the most important things in creating greater wealth –  savings.

After doling out all the regular costs of living, hopefully you will have a small cash pile left over that you want to save for a rainy day. But where do you put it to greatest effect?

In today’s low-interest rate environment – the Reserve Bank of Australia has kept its official cash rate at the record low of 1.5 per cent for 27 consecutive months – any extra you can prise out of a lending institution in the form of a higher savings rate is important.

The RBA cash rate is simply the interest rate the central bank charges on overnight loans to commercial banks. It’s important because any change to it can have widespread repercussions for how much you pay for your mortgage – or savings interest rates.

There are a variety of different savings accounts, so comparing them and choosing the right one for you and your goals can seem overwhelming. While there is no one-size-fits-all account to suit every need, if you consider the following features, your choice may become a little easier.

We do your homework

The most important thing when looking for the best savings deal is to shop around. There are a number of websites that will do the leg work for you at a click of a button.

Canstar, Australia’s biggest independent financial comparison website, is a great place to start. It researches and analyses thousands of products across banking, insurance and superannuation/investments. Best of all, its services are free.

So, how do our financial institutions stack up in the savings account race?

The New Daily used Canstar to research the best places to park your money and came up with a top-five list of savings options.

Interestingly, some of the better deals can be found from some of the lesser names.

For the sake of simplicity, we used a deposit of $5000 at a base interest rate for our Canstar input. We included any introductory rate bonuses and added that the bank must have a Canstar five-star rating, based on its evaluation of the account’s features and benefits.

Here’s what we found as the best deals on offer:

Savings accounts are designed to help you boost your cash pile faster through compound interest. They offer a higher interest rate than basic transaction accounts.

Some also make it harder for you to access your money, so you are not as tempted to dip in and spend.

Leave your savings there long enough and they will quickly grow.

So how does compound interest work? It’s simply the interest paid on the initial amount you put into a savings account, plus the accumulated interest on money you have invested – so in effect you earn interest on interest.

Hard yards for big rewards

Steve Mickenbecker, a financial executive with Canstar, said it was “slim pickings” when it came to finding a savings account with attractive returns, but they are out there. And for those willing to work a little harder, there can be ways to work the system.

Mr Mickenbecker said there were two ways savers could improve the amount they make from their accounts. 

The first is to look around for accounts that offer attractive bonus rates for the first few months, and then switch from these accounts to a new bank with a similar bonus offer when the initial bonus rate reverts back to the base rate.

“This is a bit more inconvenient, and you have to be very disciplined to make it work,” he said.

The other is to divide your savings into short-term and long-term savings, and only place short-term savings into a traditional bank account.

The remaining funds can then be placed in either a bonus savings account (which offer more attractive returns but only when certain, often difficult, conditions are met), or in a term deposit (which offer better returns but will mean that money can’t be accessed until a pre-determined date in the future).

“Be prepared to earn less on your short-term savings, and assess how long you can afford to tie up your long-term savings for. You’ll have to work a little harder, but you’ll make more out of your savings,” he said.

The best fit

To determine the best savings account for you, it is important to compare some important information.

Firstly, the interest rate. How regularly do you receive interest on your savings and how long are any introductory interest rates bonuses on offer?

Is there a minimum or maximum account balance?

What are the account-keeping fees?

And finally, what interest do you lose if you withdraw money and what rewards do you get if you deposit money regularly?

The most important thing when putting your cash into a savings account is to leave it there for as long as possible, to gain the full benefit of compounding interest.

Do that and you will be surprised at just how fast your nest egg will grow.