If there is one thing your bank hates to do, it is to pay you a high interest rate on your “at call” savings, which is why most banks and other savings institutions now put some really difficult barriers and hoops in the way of you earning their top interest rates.

Some of them force you to top up your account with a fresh deposit every month – not including the interest payment – or they will revert you to a tiny interest rate if you haven’t jumped through that particular hoop; others have a nice, juicy introductory interest rate, before reducing the savings rate on their high interest savings account down the track to something much smaller.

Another common condition is capping the amount of money on which the high interest can be earned.

Macquarie Makes an Unconditional Offer

So, it is an interesting strategy by Macquarie Bank (ASX: MQG) to totally get rid of all those annoying conditions and hoops that customers need to jump through and simply pay a high rate of interest on their savings accounts of 4.5%.

With Macquarie pushing hard into grabbing retail market share off the big four – Commonwealth (ASX: CBA), Westpac (ASX: WBC), ANZ (ASX: ANZ) and NAB (ASX: NAB) – the simplicity of their high interest savings account has been a valuable tool in growing their reach.

They are getting “bums on seats” too, with the bank’s retail deposits growing by 11% over the six months to June.

High Rates Now Apply to $2 Million Deposits

Those Australian Prudential Regulation Authority (APRA) numbers might even improve further now that Macquarie has increased the eligible account balance from $1 million to $2 million – a move that should attract a lot of wealthy Australians, who are a natural fit for the Macquarie customer base.

Having now grabbed a 5% share of the massive $1.6 trillion deposit market, it will be interesting to see how Macquarie keeps the momentum flowing into other bank products such as housing and business loans, credit cards, and other products.

The momentum is certainly with Macquarie, with its $82.5 billion in retail deposits up 11% over the past six months – a great result compared to 2.2% deposit growth across all banks.

Rapid Growth in Home Loan Book

Macquarie also grew its home loan book by 2.3% in June compared to May, which is also much faster than the bigger banks and puts Macquarie’s mortgage market share at an impressive 6.17%.

Admittedly, Macquarie is having to work harder and pay more to get these deposits compared to the big four, which have a large rump of deposit accounts paying virtually no interest.

It is a good marketing strategy though and the competition is certainly keeping the market a bit more honest and hopefully slowing down the race to the bottom of increasingly restrictive “rules” that need to be obeyed to qualify for higher rates on “at call” accounts.

The next big test for all high-interest savings accounts is this week’s August Reserve Bank board meeting, which is almost certain to reduce the official cash rate by 25 basis points to 3.6%, leading to an inevitable reshuffling of deposit and loan rates across the board.