Interest rates are at a cyclical high, and now is the time to get great interest rates by putting money into a high interest savings account. Banks, of course, are highly regulated, and interest rates are set based on the official cash rate decided by the Reserve Bank of Australia (RBA). When the economy is growing strongly, the RBA may periodically decide to raise the cash rate for the purpose of keeping the national economy in balance. The banks set the rate of interest on savings accounts based on this official cash rate, so when the official cash rate goes up so do the rates on most savings accounts. Currently, it would be very reasonable to expect to receive as much as seven percent on some large deposit accounts.

While you may reasonably expect that a well-known bank is legitimate in its offerings of high interest savings accounts, there are other organisations that attempt to portray themselves as just as secure, but are on decidedly shaky ground.

There is a difference too, between a legitimate high interest savings account, and a "high yield investment program" or a "prime bank" fraud. A legitimate high interest savings account is offered by a known bank, and offers you services such as an ATM card, bill paying online, and most importantly, you can get access to your money whenever you need it, in most cases. Other schemes that claim to pay extremely high rates of interest (often several times that of a legitimate bank's highest rate) may be fraudulent. In the case of the "prime bank" scheme, fraudsters claim to represent the world's largest banks, and further claim to have access to secret bank-to-bank transactions that pay interest rates in the hundreds, or even thousands of percent. The promoter may claim that the minimum deposit to get into the program is several hundreds of millions of dollars, but he is able to get you a "share" of the minimum, or to allow you to "piggyback" on somebody else's investment, so that you can get in on the action for just a few hundred dollars. In fact, there is no such thing as a prime bank instrument. The promoters of this type of scheme attempt to confuse their victims by explaining a very complicated banking scheme, whereby financial institutions lend each other money or leverage existing money, to gain an astronomical return. In fact, it is all smoke and mirrors, and banks simply do not work that way.

Similarly, so-called high-yield investment programs, or HYIPs, are almost always nothing more than simple Ponzi schemes. An HYIP may promise incredibly high interest rates or returns, on deposits of any amount. Often, these will take deposits only in alternative exchanges, such as "electronic gold". You can usually tell a bogus HYIP from a legitimate offering just by the presentation. A fraudulent HYIP will focus its promotion on the astronomical return you can receive, without giving much detail about how the funds are actually invested. Any legitimate high-yield savings account, managed fund, or investment program will tell you in detail how the funds are managed and invested, and in what proportion.

There are of course, investment programs that do offer the potential for a very high return beyond that of a bank savings account, and some are run by legitimate, licensed fund managers. However, risk is always clearly noted, and the amount of risk goes up in direct proportion to the amount of promised return.