ANZ and NAB first big banks to cut savings rates again

ANZ and NAB first big banks to cut savings rates again

ANZ and NAB have today reduced their savings rates following the Reserve Bank’s 2 July decision to cut the cash rate to 1 per cent. 

NAB CUTS

Effective today, NAB has cut most savings accounts by 0.19 percent, matching the cut it made to home loan rates. This fulfils the bank’s promise not to lower its savings rates by more than its mortgage rates.

iSaver (intro rate for 4 months)

Old rates

New rates

Intro rate

Ongoing rate

Intro rate

Ongoing rate

July cut

2.30%

0.30%

2.11%

0.11%

-0.19%

 Reward Saver (1 deposit, no withdrawals for max rate each mth)

Old rates

New rates

 

Base rate

Max rate

Base rate

Max rate

July cut

0.30%

2.05%

0.11%

1.86%

-0.19%

 ANZ CUTS

ANZ has cut its Online Saver account by 0.15 per cent and its Progress Saver by 0.25 per cent following a 0.25 per cent cut for its variable home loan customers. 

Online Saver (intro rate for 3 months)

Old rates

New rates

Intro rate

Ongoing rate

Intro rate

Ongoing rate

July cut

2.10%

0.30%

1.95%

0.15%

-0.15%

Progress Saver (deposit $10/mth, no withdrawals for max rate each mth)

Old rates

New rates

 

Base rate

Max rate

Base rate

Max rate

July cut

0.01%

2.20%

0.01%

1.95%

-0.25%

RateCity.com.au research director Sally Tindall said ANZ and NAB’s intro rate savings accounts now earned next to nothing after the honeymoon rate finishes.

“NAB is now offering an ongoing rate of 0.11 per cent on its Reward Saver account while ANZ is offering a rate of 0.15 per cent on its Online Saver account. Customers can do better than this,” she said.

“NAB and ANZ were first of the big four out of the blocks this time with cuts for savers but Australia’s two biggest banks are unlikely to be far behind. The question is not if they will cut, but when and by how much.

“Given that CBA and Westpac didn’t pass on the full cut to home loan customers, it’ll be interesting to see what they do to their savings accounts,” she said.

Some of the highest savings account rates on RateCity.com.au

Bank

Max rate

Conditions

Endeavour Mutual Lifestyle Account

2.75%

Deposit $400/mth. Up to age 35

Ubank USAver with Ultra

2.60%

Deposit $200/mth into Ubank savings or trans account

MyState Bonus Saver

2.60%

Deposit $20/mth and make 5 transactions from linked account

RAMS Saver

2.55%

Deposit $200/mth and no withdrawals

Australian Unity Active Saver

2.55%

Deposit $250/mth and no withdrawals

 HOW THE BIG BANKS SAVINGS ACCOUNTS CURRENTLY STACK UP

Big four savings accounts – conditional rates

Bank

Product

Base rate

Max. rate

How to earn max. rate

ANZ

Progress Saver

0.01%

1.95%

Deposit $10 and no withdrawals per mth.

CBA

GoalSaver

0.01%

1.40%*

Deposit $200 and no withdrawals per mth

NAB

Reward Saver

0.11%

1.86%

One deposit and no withdrawals per mth

Westpac

Life

0.80%

2.10%

Make a deposit and end with higher balance per mth

* For balances under $50K. CBA offers higher rates for higher balances.

Big four savings accounts – introductory rates

Bank

Product

Base rate

Max. rate

Introductory term

ANZ

Online Saver

0.15%

1.95%

3 months

CBA

NetBank Saver

0.30%

2.20%

5 months

NAB

iSaver

0.11%

2.11%

4 months

Westpac

eSaver

0.30%

2.31%

5 months

Note: CBA and Westpac expected to move their savings rates following the July cash rate cut. 

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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

What are the two types of NAB locked savings accounts?

With a locked savings account in NAB, you can earn bonus interest and learn financial discipline. NAB offers two types of locked savings accounts, each with their own terms and conditions.

The NAB Reward Saver account pays a variable base interest rate of 0.05 per cent per annum and a bonus interest of 0.55 per cent. You’re eligible for the bonus if you make a minimum of one deposit on or before the second last banking day and have no withdrawals in the month.

Meanwhile, the NAB iSaver account provides 0.05 per cent as the standard base interest rate and a fixed bonus margin of 0.55 per cent during the first four months from the date of opening the account. You can park your cash in the account and enjoy unlimited monthly transfers between linked daily bank accounts without impacting the interest rate.

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.

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.

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

What is a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

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.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit ingdirect.com.au.

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

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

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.

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.

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.