Powered by MOMENTUM MEDIA
subscribe to our newsletter

Major bank savers face rate cuts

The Commonwealth Bank of Australia (CBA) has announced it has slashed interest rates on some of its savings accounts as it seeks to recoup some of the costs from cuts to the cash rate.

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.

Advertisement
Advertisement

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.”

PROMOTED CONTENT


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]

Major bank savers face rate cuts
CBA
mortgagebusiness

Grow your business exponentially in 2022!

Discover the right strategies to build a more structured, efficient and profitable businesses at The Adviser’s 2022 Business Accelerator Program.

Visit the website here to secure your ticket.

Malavika Santhebennur

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.

Latest News

Sales of new detached homes continued to increase for five consecutive months, despite the end of HomeBuilder grants, confirming a strong d...

An economist with Bluestone has responded to predictions that the cash rate will increase in August, calling the notion “nonsensical”. ...

The Real Estate Institute of Australia (REIA) said it’s expecting demand for sustainable homes and living to increase over 2022. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

When do you expect the cash rate to start increasing?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.