No RBA cut likely, yet banks keep stinging savers

No RBA cut likely, yet banks keep stinging savers

Savers are continuing to be stung by falling interest rates even though the Reserve Bank isn’t expected to cut the cash rate today. analysis shows in the last month:

  • More than 40 banks cut saving account rates, including CBA, Macquarie Bank and AMP.
  • Average cut was 0.19 per cent.
  • Average ongoing savings rates is now 0.59 per cent. research director Sally Tindall, said: “complacent savers are earning next to nothing in this low rate environment.”

“Seventy-six per cent of all household deposits are held by the big four banks, yet they’re the ones offering some of the lowest ongoing savings rates on the market.

“Customers earning 0.05 per cent on their hard-earned cash should pick their savings off the floor and move to a higher rate.” analysis shows if a big four bank customer with a $50,000 balance moved from 0.05 per cent, to the highest ongoing rate on the market of 1.65 per cent, they could earn an extra $806 in interest in 12 months, provided they met the terms and conditions and interest rates remained the same.

“The only big bank bucking the trend is Westpac, which is stumping up an impressive 3 per cent for customers aged 18 to 29,” she said.


Savings rates have been plunging at the same time deposits have hit an all-time high. The latest APRA statistics show the total bank deposits from household increased by $64.4 billion since the start of COVID-19 (March 2020) and $100.4 billion year-on-year.

Tax refunds, the second round of COVID super payouts and months of low-cost lockdown living have contributed to the increase in deposits this July.

“Deposit are at an all-time high, which makes it even harder for banks to offer decent savings rates. They don’t need to attract new savers – they can’t even afford to offer respectable returns to the customers they’ve got.

“Macquarie Bank last week slashed its introductory rate by 0.50 per cent to 1.50 per cent while AMP terminated its welcome rate altogether,” she said.

APRA monthly banking statistics: deposits from households

  % change $ change
Month on month change (June - July 2020)


$30.7 billion increase


(March - July 2020)


$64.4 billion increase


(July 2019 - July 2020)


$100.4 billion increase

Deposits from households on the books of Authorised Deposit Taking Institutions (ADI's). Source: APRA Monthly Banking Statistics, July 2020, issued 31 August 2029.

Big four bank savings changes

The average big four bank conditional savings rate has dropped to 0.92 per cent in the last year, while the cash rate has dropped by 0.75 per cent.

Big four bank conditional savers: then and now

Bank Max rate –

1 year ago

Max rate - today Difference
CBA GoalSaver




Westpac Life




NAB Reward Saver




ANZ Progress Saver








Source: Based on a balance of less than $50K. CBA has higher rates for higher balances. Based on accounts with no age restrictions.

Big four bank standard savers: then and now

The average big four bank introductory rate has dropped by 1.12 per cent while the ongoing savings rate has dropped by 0.09 per cent.

  1 year ago Today
Bank Intro rate Ongoing Intro Ongoing
CBA Netbank Saver





Westpac eSaver





NAB iSaver





ANZ Online Saver










Source: Intro rate terms - CBA & Westpac 5 months, NAB 4 months, ANZ 3 months.

Highest ongoing savings rates on
Bank Max rate Conditions for max rate
ING 1.65% Deposit pay of $1,000+ and make 5+ card transactions per month.
MyState Bank 1.65% Deposit $20+/mth and make 5+ purchases in linked account.
CUA 1.60% Deposit $1000+/mth into a linked account.
UBank 1.60% Deposit $200+/mth into a linked account
Move Bank 1.60% Deposit $200+/mth and no withdrawals
86 400 1.60% Deposit $1000+/mth into a linked account.
Up 1.60% 5+ card purchases from linked account
Source: Excludes accounts with age restrictions.

*Average rate of the savings accounts on assuming intro rates have expired, and that monthly terms and conditions are met and excludes accounts with age restrictions.

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These services are handled by the Australian Financial Complaints Authority, a non-profit government organisation that addresses and resolves financial disputes between customers and financial service providers.

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An estimate of how much your desired property is worth. 

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Specialist lenders, also known as non-conforming lenders, are lenders that offer mortgages to ‘non-vanilla’ borrowers who struggle to get finance at mainstream banks.

That includes people with bad credit, as well as borrowers who are self-employed, in casual employment or are new to Australia.

Specialist lenders take a much more flexible approach to assessing mortgage applications than mainstream banks.

What is a redraw fee?

Redraw fees are charged by your lender when you want to take money you have already paid into your mortgage back out. Typically, banks will only allow you to take money out of your loan if you have a redraw facility attached to your loan, and the money you are taking out is part of any additional repayments you’ve made. The average redraw fee is around $19 however there are plenty of lenders who include a number of fee-free redraws a year. Tip: Negative-gearers beware – any money redrawn is often treated as new borrowing for tax purposes, so there may be limits on how you can use it if you want to maximise your tax deduction.

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The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.

Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.  

Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.

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A construction loan is loan taken out for the purpose of building or substantially renovating a residential property. Under this type of loan, the funds are released in stages when certain milestones in the construction process are reached. Once the building is complete, the loan will revert to a standard principal and interest mortgage.

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How often you wish to pay back your lender. 

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The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

What is the average annual percentage rate?

Also known as the comparison rate, or sometimes the ‘true rate’ of a loan, the average annual percentage rate (AAPR) is used to indicate the overall cost of a loan after considering all the fees, charges and other factors, such as introductory offers and honeymoon rates.

The AAPR is calculated based on a standardised loan amount and loan term, and doesn’t include any extra non-standard charges.

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Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

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The exact repayment amount for a $250,000 mortgage will be determined by several factors including your deposit size, interest rate and the type of loan. It is best to use a mortgage calculator to determine your actual repayment size.

For example, the monthly repayments on a $250,000 loan with a 5 per cent interest rate over 30 years will be $1342. For a loan of $300,000 on the same rate and loan term, the monthly repayments will be $1610 and for a $500,000 loan, the monthly repayments will be $2684.

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