CBA and Westpac cut savings rates on popular accounts

CBA and Westpac cut savings rates on popular accounts

The Commonwealth Bank and Westpac have today cut rates on some of their most popular savings accounts.

CBA cut its introductory rate on the NetBank Saver and the bonus rate on the GoalSaver for balances over $50,000 – both by 0.05 per cent.

However, the biggest cut of 0.10 per cent was reserved for its Youthsaver account attached to the Dollarmites program.

CBA Youthsaver

  Old rate  Today Difference
Max Rate 0.80% 0.70% -0.10%

CBA NetBank Saver

  Old rate  Today Difference
Intro Rate (5 mths) 0.55% 0.50% -0.05%
Ongoing rate 0.05% 0.05% 0%

CBA GoalSaver

  Old max rate Today - max rate Difference
Under $50K 0.45% 0.45% 0%
Over $50K 0.50% 0.45% -0.05%

Deposit $200+ and make no withdrawals per mth for max rate.

The country’s second largest bank, Westpac, has cut many of its popular savings accounts by 0.15 per cent. However, the 3 per cent rate for savers aged 18-29-years-old remains unchanged.

Westpac subsidiaries St George, Bank of Melbourne and BankSA have also trimmed savings rates today.

Westpac Life

  Old rate Today Difference
Max rate 0.55% 0.40% -0.15%

Balance must be higher at end of mth for max rate.

Westpac eSaver

  Old rate Today Difference
Intro Rate (5 mths) 0.55% 0.40% -0.15%
Ongoing rate 0.05% 0.05% 0%

Westpac Bump

  Old rate Today Difference
Max rate 0.80% 0.65% -0.15%

Balance must be higher at end of mth for max rate. database analysis

Analysis from shows since January 1 this year, 19 banks have cut savings rates, with the highest ongoing rate for all Australians now sitting at 1.35 per cent.

However, compared to this time last year, the average big four bank conditional savings rate has plunged by 0.93 per cent, significantly more than the RBA has cut the cash rate.

Savings rates changes in the last year

  Highest ongoing rate Average savings rate Big 4 goal savers RBA Cash rate
Jan 2020 2.25% 0.88% 1.41% 0.75%
Jan 2021 1.35% 0.39% 0.48% 0.10%
Difference 0.90% 0.49% 0.93% 0.65%

Source: Rates are from January 22, 2020 and January 22, 2021. research director, Sally Tindall, said: “These cuts are yet another blow for savers with Australia’s two largest banks.

“It’s particularly hard for kids in the Dollarmites program who have little choice than to stick with CBA if they want to keep banking at school.

“Right now, these children are earning just 0.70 per cent. On $500, that’s barely going to get them an ice cream each year,” she said.

“Today the average ongoing savings rate on our database is a measly 0.39 per cent, but if you’re prepared to shop around you could find a rate three times higher.

“The irony is, we’ve never had so much money in the bank. The latest APRA statistics show we’ve got almost $120 billion more in the bank than a year ago, as families move to build up their rainy-day funds.

“Banks are likely to keep chipping away at their rates, even if the cash rate stays the same. If you’ve got money in the bank, give your account a health check once every few months to make sure it’s still competitive.

“Young Australians are the exception – they can still earn rates of up to 3 per cent, if they know where to look,” she said.

Westpac is offering 3 per cent on balances up to $30,000 for anyone aged 18 – 29, while Bank of Queensland is offering 3 per cent for young Aussies aged between 14 and 24 but only on balances up to $10,000.

Highest conditional ongoing savings accounts on

(excludes accounts specifically for younger Australians)

Bank Account Max rate
 ING    Savings Maximiser  1.35%
 MyState Bank  Bonus Saver Account  1.20%
 ME Bank  Online Savings Account  1.20%

Source: Conditions apply for max interest rate.

Big four banks conditional savings rates

Bank   Account   Max rate

(if conditions met)

CBA   GoalSaver   0.45%  
Westpac   Life   0.40%  
NAB   Reward Saver   0.55%  
ANZ   Progress Saver   0.50%  

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


Big four bank: standard savings rates

Bank   Account   Intro rate   Ongoing rate  
CBA   NetBank Saver (5 mths)   0.45%   0.05%  
Westpac   eSaver (5 mths)   0.40%   0.05%  
NAB   iSaver (4 mths)   0.60%   0.05%  
ANZ   Online Saver (3 mths)   0.45%   0.05%  



  Nov-20 Nov-19 Difference
Deposits by households $1.099 trillion $979.52 billion $119.96 billion

12% increase

Source: Deposit data from APRA monthly banking stats released Jan, 2021.

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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

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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 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 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:

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As you are opening a savings account and not borrowing funds, this credit check is considered a soft inquiry and should not affect your credit score. If the bank has run the credit check, you can often still open a savings account even if you have a poor score, provided you meet other requirements. 

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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.

How do I open a savings account?

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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.

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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.

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Can you direct deposit to a savings account?

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