Borrow
Final big bank alters savings rate
The last of Australia’s big four banks has announced a reduction in its savings rates following the historical lowering of the country’s official cash rate.
Final big bank alters savings rate
The last of Australia’s big four banks has announced a reduction in its savings rates following the historical lowering of the country’s official cash rate.
The Commonwealth Bank of Australia has announced that it has cut its online savings rate by 0.15 per cent, putting them on par with the other major banks.
Commenting on the major banks’ moves, Canstar’s finance expert Steve Mickenbecker said retirees will be significantly worse off with rates continuing to fall.
“Self-funded retirees now have to look back nine years for their last pay rise, when the Reserve Bank increased the cash rate to 4.75 per cent,” he highlighted.
“In 2010, the base rates for savings accounts with the major banks averaged at approximately 4.50 per cent, just 0.25 per cent below the cash rate,” Mr Mickenbecker outlined.
Now, with rates of 0.15 per cent and 0.11 per cent, he flagged that the major banks miss the cash rate mark by 0.85 per cent and more.
Falls since the start of January
Canstar research showed that since the start of 2019, investors have lost between 0.2 and 0.54 per cent on their base and bonus saving interest rates due to rate reductions:
- ANZ’s progress saver offered 2.40 per cent interest at the beginning of the year and now sits at 1.95 per cent, down 0.45 of a percentage point.
- Commonwealth Bank’s goal saver was 1.65 per cent back in January and currently sits at 1.15 per cent, a difference of 0.50 of a percentage point.
- NAB’s reward saver was previously offering 2.40 per cent interest, with this figure now sitting at a markedly lower 1.86 per cent, having fallen by 0.54 of a percentage point.
- Westpac’s life account offered 2.30 per cent interest at the start of 2019 and currently sits at 2.10 per cent, having dropped just 0.20 of a percentage point.
Breaking up with the big four
If further rate cuts eventuate, Mr Mickenbecker said investors may move away from the big four banks towards other ADIs.
“With commentators expecting another 0.25 percentage point cut to the cash rate this year, savers are now on a zero interest rate trajectory,” he stated.
Calling the trajectory “too much of a crash landing” for some savers, he noted that they may look for a smoother flight path elsewhere, with interest rates offering up to 1.95 per cent still available from some of the smaller authorised deposit-taking institutions.
RELATED ARTICLES
About the author
About the author
Banking
Brokers own the mortgage funnel: Why a 77% share is reshaping bank strategy in Australia
Australia’s mortgage market has quietly consolidated around one gatekeeper: the broker. With brokers facilitating roughly 77% of new home loans, distribution power has migrated from bank branches to ...Read more
Banking
Commonwealth Bank leads consideration while People First Bank tops satisfaction in YouGov’s latest rankings
In a revealing snapshot of Australia's banking landscape, the Commonwealth Bank (CBA) has emerged as the most considered financial institution among prospective customers, according to YouGov's ...Read more
Banking
End of the easing: what a major bank’s call signals for Australian balance sheets
A major Australian bank now argues the Reserve Bank’s rate-cut run has hit a pause, resetting the risk-free rate narrative across corporate Australia. The Reserve Bank of Australia’s latest Statement ...Read more
Banking
Open banking, real returns: How an Australian brokerage turned CDR data into deal velocity
Open banking is no longer a whiteboard theory—it’s a working growth engine. This case study unpacks how a mid-sized Australian brokerage (“Pink Finance”) operationalised Consumer Data Right (CDR) data ...Read more
Banking
Open banking’s quiet revolution: how one broker’s data play rewrites speed, trust and margin
Open banking is shifting from compliance cost to commercial engine, and early adopters in Australia’s broking market are already monetising the curve. The playbook: consented bank-grade data piped ...Read more
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
Brokers own the mortgage funnel: Why a 77% share is reshaping bank strategy in Australia
Australia’s mortgage market has quietly consolidated around one gatekeeper: the broker. With brokers facilitating roughly 77% of new home loans, distribution power has migrated from bank branches to ...Read more
Banking
Commonwealth Bank leads consideration while People First Bank tops satisfaction in YouGov’s latest rankings
In a revealing snapshot of Australia's banking landscape, the Commonwealth Bank (CBA) has emerged as the most considered financial institution among prospective customers, according to YouGov's ...Read more
Banking
End of the easing: what a major bank’s call signals for Australian balance sheets
A major Australian bank now argues the Reserve Bank’s rate-cut run has hit a pause, resetting the risk-free rate narrative across corporate Australia. The Reserve Bank of Australia’s latest Statement ...Read more
Banking
Open banking, real returns: How an Australian brokerage turned CDR data into deal velocity
Open banking is no longer a whiteboard theory—it’s a working growth engine. This case study unpacks how a mid-sized Australian brokerage (“Pink Finance”) operationalised Consumer Data Right (CDR) data ...Read more
Banking
Open banking’s quiet revolution: how one broker’s data play rewrites speed, trust and margin
Open banking is shifting from compliance cost to commercial engine, and early adopters in Australia’s broking market are already monetising the curve. The playbook: consented bank-grade data piped ...Read more
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
