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CBA fails to lift savings account rates but offers customers an olive branch

CBA fails to lift savings account rates but offers customers an olive branch

Australia’s largest bank, CBA, will not pass on Tuesday’s cash rate hike to its savings accounts at this stage, despite hiking variable home loan rates.

Westpac, NAB and ANZ are all passing on 0.25 percentage points to their bonus saver accounts. Westpac is also passing the hike on to its retiree account.

Big four banks’ savings accounts – what’s changed post RBA?

22.04.05 savings RBA big bank changes

What is CBA doing for savers?

Instead of hikes to savings accounts, CBA is offering an 18-month term deposit special, at a rate of 2.25 per cent, paid annually, for balances between $5,000 and below $2 million, effective 13 May.

CBA’s term deposit special is well above what the big four banks are offering on 1- and 2-year term deposit accounts, however, it falls short of the market leaders in this space.

The RateCity.com.au database shows the highest 1-year term deposit rate is currently 2.70 per cent, while the highest 2-year term deposit is 3.50 per cent - both from Judo Bank. Macquarie Bank and AMP are also offering higher rates than CBA’s special.

Post RBA hike: Big four bank bonus savings rates

BankAccountIncreaseMax rateEffective date
CBAGoalSaver

0%

0.25%

N/A

WestpacLife

+0.25%

0.50%

17 May

NABReward Saver

+0.25%

0.50%

13 May

ANZProgress Saver

+0.25%

0.40%

13 May

Source: RateCity.com.auConditions apply for max rate.

RateCity.com.au research director, Sally Tindall, said: “This is a hugely disappointing decision from CBA. Savings customers with Australia’s biggest bank have a right to feel ripped off.”

“The bank has offered up nothing for kids, and nothing for regular savers,” she said.

“CBA has put an 18-month term deposit special on the table as an olive branch, but unless the bank’s savings customers proactively move their money into this account and lock it up for a year and a half, they’ll miss out on this rate hike entirely.

“At 2.25 per cent for 18 months, this term deposit special is competitive, however, these kinds of products won’t suit everyone.

“Westpac, NAB and ANZ have all passed on the cash rate hike to their popular bonus saver accounts, and that was the right thing to do. However, some of their customers with different accounts have also missed out.

“The hiking of the cash rate was meant to mark a turn-around point for savers. Instead, it’s fallen flat for millions of Australians.

“The irony is, the more money we put in the bank ready for a rainy day, the less likely the banks are to offer competitive rates.

“Paying out a higher rate of interest on a record level of deposits will get quite expensive for Australia’s biggest banks, particularly with plenty more cash rate hikes waiting in the wings.

“Now is the time for customers to give their savings account a health check. There are still some competitive rates out there, but they typically come with layers of fine print, so savers should make sure they qualify,” she said.

Highest 1 year term deposit rates on RateCity.com.au

BankRateInterest payment frequency
Judo Bank

2.70%

Annually
Macquarie Bank

2.50%

Annually
AMP Bank

2.45%

Annually

Highest 2-year term deposit rates on RateCity.com.au

BankRateInterest payment frequency
Judo Bank

3.50%

At maturity
Macquarie Bank

3.30%

Annually
AMP Bank

3.25%

Annually

Highest term deposit rates, regardless of length on RateCity.com.au

BankTermRateInterest payment frequency
Judo Bank60 months

4.05%

At maturity
AMP Bank60 months

3.90%

Annually
Macquarie Bank60 months

3.50%

Annually

Source: RateCity.com.auAbove deposit rates are for balances of $20,000.

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This article was reviewed by Data Research Specialist Piyush Pillai before it was published as part of RateCity's Fact Check process.

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