ANZ the second big bank to cut savings post RBA

ANZ the second big bank to cut savings post RBA

ANZ has today cut rates on its popular savings, term deposit and pensioner accounts by up to 0.20 per cent.

To date, 28 banks have cut savings rates on the back of the RBA cut on 3 November, including big four banks CBA and now ANZ.

The average ongoing savings rate on RateCity.com.au is now just 0.46 per cent and is set to fall further as cuts keep coming.

KEY ANZ CUTS

ANZ Online saver

  Before Today Difference
Intro Rate (3 mths) 0.65% 0.45% -0.20%
Ongoing rate 0.05% 0.05% 0%

ANZ Progress Saver

  Before Today Difference
Max rate 0.70% 0.50% -0.20%
Base rate 0.01% 0.01% 0%

Deposit $10+ and make no withdrawals per mth for max rate.

RateCity.com.au research director, Sally Tindall, said: “Today’s cuts from ANZ will be a hard pill to swallow for customers relying on the interest they earn from their savings accounts.”

“The bank has refrained from cutting its base rates, which is a small blessing, but regular savers who do the right thing to qualify for the maximum rates are going to find their interest has been slashed,” she said.

“It’s now only a matter of time before Westpac and NAB drop savings rates.

“It’s not easy operating in a low rate environment where profit margins are feeling the squeeze, but there aren’t many winners on the back of this month’s rate cut. Savers have taken a hit, most mortgage customers are unlikely to get relief and credit cards rates haven’t moved a muscle.

“If you have your savings with a big four bank, you’d do well to turn your back on their sinking rates and move to higher ground,” she said.

Big four banks conditional savings rates

Bank Account Max rate

(if conditions met)

CBA GoalSaver

0.45%

Westpac Life

0.75%

NAB Reward Saver

0.70%

ANZ Progress Saver

0.50%

Source: RateCity.com.au. Note rates are for balances under $50K.

Big four bank: standard savings rates

Bank Account Intro rate Ongoing rate
CBA NetBank Saver (5 mths)

0.60%

0.05%

Westpac eSaver (5 mths)

0.75%

0.05%

NAB iSaver (4 mths)

0.75%

0.05%

ANZ Online Saver (3 mths)

0.45%

0.05%

Source: RateCity.com.au

Highest ongoing savings rates

Bank Max rate Conditions
MyState 1.50% Deposit $20+ and make 5 trans per mth
ING 1.35% Deposit $1,000+ and 5 card purchases per mth
UBank 1.31% Deposit $200+ per mth

Source: RateCity.com.au
Note: Excludes accounts specifically for younger Australians.

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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 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.

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 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.

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)

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.

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 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 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.

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.

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.

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 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. 

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.