AMP, Macquarie target introductory rates, savers suffer

AMP, Macquarie target introductory rates, savers suffer

AMP and Macquarie have put the squeeze on savers this week, as banks zero in on introductory rates. 

While borrowers are generally benefitting under the low interest rate environment, Australian savers continue to suffer, with the official cash rate at a record low of 0.25 per cent.

AMP has removed its introductory rate of 1.5 per cent, which previously reverted to 1 per cent after six months. This means new customers will no longer access a higher interest rate when joining, and the standard rate of 1 per cent will now apply on the entire balance.

It is the first bank to remove its honeymoon rate altogether in the past two months, according to a RateCity analysis.

AMP’s changes have already come into effect – as of August 28.

Meanwhile, Macquarie Bank has reduced its four-month introductory savings rate by 50 basis points to 1.50 per cent on balances of up to $250,000. 

The introductory rate reverts to the ongoing rate of 1.35 per cent, which has not changed, after customers stay with the bank for four months.

The changes come after CBA trimmed its savings rates by as much as 10 basis points on certain accounts last week. 


New customers miss out as introductory rates cut

As banks continue to cut interest rates on savings accounts, honeymoon rates are also being shaved, with 19 banks on the RateCity database reducing introductory rates in the past two months.

All of the big four banks have slashed their introductory rates in the past year. NAB took the lead, bringing its honeymoon rate down from the 2 per cent range to below 1 per cent, representing a drop of 1.16 per cent during this period.

ANZ came a close second, slashing its introductory rate by 1.15 per cent in the past year.

The cuts brought the average introductory rate among the big four down by 1.09 per cent to 0.93 per cent in the year to August 2020. In comparison, the Reserve Bank of Australia lowered the cash rate by three quarters of a per cent in the same period.

The average big four honeymoon rate is now 1.27 per cent lower than the highest introductory rate on the RateCity database – a 2.2 per cent rate from Heritage Bank, which reverts to 0.80 per cent after four months.

Big four banks – introductory and ongoing rates (August 2019 and August 2020)

Bank Product Aug 2019 Intro rate Aug 2020 Intro rate Intro term Intro rate difference – Aug 19 vs Aug 20 Aug 2019 Ongoing rate Aug 2020 Ongoing rate
CBA NetBank Saver



5 mths




Westpac eSaver



5 mths




NAB iSaver



4 mths




ANZ Online Saver



3 mths











Source: RateCity. Note: Accurate as of August 28, 2020.

Australians focus on saving

As Australians financially adjust themselves to a recession, households across the country are stashing more cash in the bank. Bank deposits jumped by 8.5 per cent to more than $1 trillion in the 12 months to June 2020, according to the latest banking figures from the Australian Prudential Regulation Authority (APRA). 

A RateCity survey of 1,009 people revealed that about 27 per cent of those who withdrew money from their superannuation due to COVID-19 deposited the funds into a bank account as an emergency fund. 

And an increasing number of Australians are considering starting an emergency fund, thanks to the pandemic, with a third planning to cut back and save, according to a recent St. George bank survey. 

Highest introductory savings rates on

Bank Product Intro rate Ongoing rate Intro term
Heritage Bank Online Saver 2.20% 0.80% 4 mths
Rabobank Australia High Interest Savings Account 2.00% 0.55% 4 mths
HSBC Serious Saver Account 1.75% 0.15% 4 mths
P&N Bank Hi Saver 1.70% 0.30% 4 mths

Source: RateCity. Note: Accurate as of August 28, 2020.

Did you find this helpful? Why not share this news?



Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy


Learn more about savings accounts

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.