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Tidal wave of cuts set to hurt savers
Savers continue to suffer from low interest rates, with two of the big four banks announcing reductions to savings rates.
Tidal wave of cuts set to hurt savers
Savers continue to suffer from low interest rates, with two of the big four banks announcing reductions to savings rates.
According to Canstar, the Commonwealth Bank will reduce rates for savers for the second time in just over a month, reducing the savings rate by 0.05 per cent.
Those who have their savings in a NetBank account have also seen the rate reduced for the six times this year, down to 0.85 per cent.
The major bank has also cut its Goal Saver account three times since January, with the cuts totalling 0.85 percentage point.
Young Australians will also be impacted, with the bank’s Youthsaver account also cut by a further 0.05 percentage point to a total rate of 1.00 per cent.
Canstar’s group executive, financial services, Steve Mickenbecker noted that while borrowers are the big winners, savers are slowly losing.
“Rarely does a week pass lately without one of the big banks cutting savings rates.
“The cuts to savings accounts continue to gently roll over savers, with hardly a ripple each time but adding up to a tidal wave. Six cuts this year from CBA have almost halved its NetBank savings rate from 1.65 per cent down to 0.85 per cent,” he said.
Over the same period, analysis by Canstar has shown regular savings accounts have been cut by 0.56 percentage point with the average rate now 0.58 per cent.
Bonus savings accounts have also fallen since January with the average rate now down to 0.93 per cent.
Mr Mickenbecker said savers should look around as better deals can be found.
“Savers can avoid a wipe-out of interest earnings with rates up to 2 per cent still available, but they have to get among the lesser-known brands to get these rates,” Mr Mickenbecker said.
“Fortunately, the government guarantee also applies to smaller authorised deposit-taking institutions, providing a safety net for your savings.”
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