CBA sneaks through a second savings cut before Christmas

CBA sneaks through a second savings cut before Christmas

The country’s largest bank, CBA, has today shaved its popular savings accounts for the second time in a month.

Today’s savings rate cuts:

  • NetBank saver intro rate cut by 0.05% down to a max rate of 0.55%.
  • GoalSaver bonus rate cut by 0.05% to 0.50% for balances over $50,000.

CBA savings rate changes since the November RBA cut

CBA has now cut saving rates twice since the November 3 RBA cut, on Friday November 13 and again today.

While the RBA cut by 0.15 per cent, CBA has shaved up to 0.25 per cent off its bonus savings rates.

CBA NetBank saver

  Pre Nov RBA Today Difference
Intro Rate (5 mths) 0.75% 0.55% -0.20%
Ongoing rate 0.05% 0.05% 0%

CBA GoalSaver account

  Pre Nov RBA - max rate Today - max rate Difference
Under $50K 0.50% 0.45% -0.05%
Over $50K 0.75% 0.50% -0.25%

Deposit $200+ and make no withdrawals per mth for max rate. Includes a 0.05% cut to the base rate down to 0.05%.

RateCity database analysis:

  • More than 70 banks have cut savings rates since the Nov 3 RBA rate cut.
  • All big four banks have cut savings rates in the last month.
  • 0.42% is the average savings rate.
  • 1.35% is the highest ongoing savings rates (see below table for details).

RateCity.com.au research director Sally Tindall said: “CBA has snuck in a second cut to interest rates right before Christmas on its popular savings accounts.

“Anyone with a GoalSaver account can now expect to earn just half a per cent in interest – and in some cases less – while anyone with a NetBank Saver is earning an ongoing rate of 0.05 per cent. CBA customers need to know they can do better than this,” she said.

“While there are higher savings rates on offer, sadly CBA isn’t the only bank hacking away at rates. In the past month over 70 banks have dropped savings rates on the back of the RBA cut.

“Australians have squirreled away almost $100 billion in extra savings since the start of COVID. The banks are jam-packed full of cash they can’t afford to pay interest on.

“While rates aren’t likely to move north for the next three years, that doesn’t mean savers should be complacent.

“If you’ve got money in the bank, check your interest rate, check your terms and conditions but also check what other banks are offering. Just because savings rates are at an all-time low, doesn’t mean you have to throw your hands up in the air,” she said.

Highest conditional ongoing savings accounts on RateCity's database

Bank Account Max rate
MyState Bank Bonus Saver Account

1.35%

ING Savings Maximiser

1.35%

UBank USave with USpend

1.25%

Source: RateCity.com.au. Conditions apply for max interest rate. Excludes accounts specifically for younger Australians.

Big four banks conditional savings rates

Bank Account Max rate

(if conditions met)

CBA GoalSaver

0.50%

Westpac Life

0.55%

NAB Reward Saver

0.55%

ANZ Progress Saver

0.50%

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

Big four bank: standard savings rates

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

0.55%

0.05%

Westpac eSaver (5 mths)

0.55%

0.05%

NAB iSaver (4 mths)

0.60%

0.05%

ANZ Online Saver (3 mths)

0.45%

0.05%

Source: RateCity.com.au. 

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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

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 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.

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.

Should I open multiple savings accounts with UBank?

UBank offers customers an opportunity to make the most of their savings by opening multiple savings accounts. Having multiple savings accounts with UBank may be ideal for savers tracking different goals in separate accounts. 

It’s important to note that to earn bonus interest, you will still need to meet the conditions of the UBank savings account every month. If you don’t make these deposits, you will receive the standard interest rate, which is typically lower. 

Keep in mind that you won’t earn bonus interest on your UBank savings account in the month an account is opened and if you open multiple savings accounts with UBank, you'll start earning any bonus interest the following month. 

It's also not yet known how long the special interest rate will hang around for, so please check with your bank for more information. 

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.

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. 

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.

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 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 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

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.

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.