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How savers are feeling the pinch as popular banks drop rates

By Cameron Micallef · July 12 2019
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egg

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How savers are feeling the pinch as popular banks drop rates

By Cameron Micallef
July 12 2019
Reading:
egg
Canstar

How savers are feeling the pinch as popular banks drop rates

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By Cameron Micallef · July 12 2019
Reading:
egg
Canstar

Savers, retirees in particular, will continue to feel the pinch as the big four begin cutting interest rates on cash accounts. 

ANZ and NAB have cut the rates today to 0.15 and 0.11 per cent, respectively, following introductory rates. 

Canstar’s finance expert, Steve Mickenbecker, believes investors can shop around to find a better deal as some providers are still offering around 2 per cent on savings accounts. 

“The introductory rate of 1.95 per cent on offer from ANZ and 2.11 per cent from NAB may sound appealing enough, but savers have to be aware the honeymoon is over after a few short months to be replaced with the reality of a 0.15 per cent or 0.11 per cent interest rate,” said Mr Mickenbecker.

“All four of the major banks reduced their online savings rates to 0.30 per cent in the aftermath of the June cash rate cut. There’s now an expectation that the other two banks will follow ANZ and NAB’s lead with similar cuts,” continued Mr Mickenbecker.

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How low can it go?

Australia is facing the prospect of zero rates for savers, which would mean savers are paying the banks to hold cash reserves, according to Mr Mickenbecker. 

“There are plenty of zero rates around the world and you think people are going to pay you to have money sitting in their vaults?” said Mr Mickenbecker.

“But apparently the wheels haven’t fallen off in Japan and some European countries when they have gone to zero rates, so it can happen,” continued Mr Mickenbecker.

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How savers are feeling the pinch as popular banks drop rates
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About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

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About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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