Commonwealth Bank hikes savings rates to 4% - here's what you need to know

Amidst the Federal Treasurer’s recent request that the national competition watchdog review the interest rates that banks are offering savers, Australia’s largest bank has boosted its introductory savings rate but its standard variable rate is significantly lower.

The Commonwealth Bank of Australia (CBA) raised its variable introductory interest rate for new NetBank Saver accounts on 19 January to 4.0 per cent per annum for the first five months. 

However, once this honeymoon period expires the fixed bonus margin reduces 2.4 per cent to the NetBank Saver standard variable rate which, at the time of writing, is 1.6 per cent.

CBA’s introductory rate is the highest of all the big four banks. However, RateCity research director Sally Tindall suggests that some customers may be taken in by the precursory offer, unaware of the eventuality.

“CBA’s new introductory rate is designed to turn heads, but customers would do well to read the fine print,” she said.

“After five months, the rate falls through the floor - an almighty caveat that is likely to catch some customers out.”

While it's easy to point the finger at CBA’s latest marketing strategy, many of Australia’s banks are employing similar tactics and their standard variable rates are, in some cases, much lower than CBA’s.

The table below outlines the difference, over time, to the big four banks’ online saver accounts’ maximum ongoing rates for existing customers. CBA’s NetBank Saver standard variable rate remains the highest and experienced the most growth since May 2022.

Source: RateCity.com.au Note: monthly conditions apply for some ongoing rates. Data accurate as of 19/01/23.

ACCC savings enquiry is forthcoming

Late last week, Federal Treasurer Jim Chalmers confirmed he had asked the Australian Competition & Consumer Commission (ACCC) to investigate bank interest rates in the savings sector, as the gap between the highest and lowest savings rates continues to widen.

The latest Australian Prudential Regulation Authority (APRA) statistics show Australian households currently have $1.33 trillion in the bank - a record high - yet many savers are still earning less than 1 per cent on their hard-earned cash.

Market leading savings interest rates have surpassed 4.50 per cent. It’s sensible to regularly check your current savings rate and ongoing rate to see if you’re receiving the maximum earning potential. 

If this is not the case, you might consider contacting your bank to see if they’re willing to offer a better rate or compare a range of differ savings accounts to take advantage of high interest introductory rates and superior ongoing rates.

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