The largest bank in Australia has reduced how much money people’s savings could earn in interest with an out-of-cycle cut.
Commonwealth Bank has cut interest rates by as much as 0.10 per cent on select Netbank Saver, Goal Saver and Youth Saver accounts.
The largest interest rate cut was made to its Youth Saver account, which dropped from 1.2 to 1.1 per cent.
Smaller 0.5 per cent cuts were made to the bank’s other savings products.
The Netbank Saver interest rate dropped from 1 per cent to its new rate of 0.95 per cent, while the rate on Goal Saver accounts with balances of at least $50,000 were cut to a 0.9 per cent.
Cuts to savings interest rates are typically tethered to fluctuations in the cash rate, but there’s been no changes since the Reserve Bank of Australia announced a record lower bound rate of 0.25 per cent in March.
CBA has cut the savings rates of its Netbank Saver and Youth Saver accounts three times since the cash rate was announced on March 20, by a total of 0.35 and 0.45 per cent respectively.
The largest bank in the market -- often a leading setter of trends – is not alone in cutting the interest rate on savings accounts.
A RateCity analysis found at least 46 banks had cut savings accounts in the last five weeks.
The big four banks had shaved savings interest rates by almost 1 per cent in the last year, when the cash rate dropped 0.75 per cent over the same period.
The average ongoing savings rates on the RateCity.com.au database -- assuming intro rates have expired and monthly terms and conditions are met -- is now just 0.60 per cent.