Major bank savers face rate cuts

The Reserve Bank of Australia (RBA) announced last week it had lowered the official cash rate by 25 bps from 0.75 per cent to 0.5 per cent, making the fourth cut since June 2019 when the easing cycle commenced.

In response, the big four bank announced last week it had passed on the RBA’s cash rate cut in full, reducing variable rates by 25 bps.

The major bank announced yesterday that in response to the RBA’s official cash rate cut last week, it has reduced the ongoing bonus rate on its Goal Saver account by 0.25 per cent, its pensioner security account by up to 0.25 per cent, and its Youth Saver account by 0.3 per cent.

The bank’s NetBank Saver account, which has an ongoing rate of just 0.1 per cent, remains unchanged.

The savings rate cuts come two weeks before the bank’s home loan changes come into effect.

RateCity.com.au research director Sally Tindall said regular savers will be hardest hit by the cuts to the savings accounts, as the bank attempts to recover some of the costs from its home loan cuts.

“Savers who go above and beyond to qualify for bonus interest deposits are going to be stung the most by these cuts,” she said.

“CBA is one of six banks so far to cut deposit rates since last week’s cash rate cut, with dozens more expected to follow.

“It’ll be interesting to see how far Westpac, NAB and ANZ shave their rates, seeing as they’ve already taken the knife to some of their savings rates this year.”

Of the big four bank conditional savings accounts, CBA’s Goal Saver is offering the lowest rate of 0.65 per cent, while Westpac Life is offering 1.55 per cent, and NAB’s Reward Saver is offering a rate of 1.5 per cent. ANZ clocked the highest savings rate, with its Progress Saver offering 1.6 per cent.

Ms Tindall added while it can be difficult to find a savings rate above inflation in the low interest rate environment, they are available.

She said the highest rate on RateCity.com.au’s database is 2.25 per cent, which is being offered by neobanks like 86 400 and Up.

“But these rates are unlikely to stick around,” Ms Tindall warned.

[Related: AMP and MyState join rate cutting frenzy]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.