Competition forces savings rates up as Westpac and NAB hike

In a much-needed boost for savers, big four banks, Westpac and NAB, have today hiked rates on their popular saving accounts.

While Westpac had announced the Life and eSaver rate changes, today’s rate increases from NAB come on top of the hike it had already passed onto Reward Saver customers last Friday.

Westpac: today’s savings changes

Westpac has increased the ongoing interest rate on its eSaver account from 0.05 per cent to 0.30 per cent for existing customers. The last time the rate was at this level for existing customers was back in July 2019.

Westpac has also increased the rates on its Life account and its Spend&Save account for young adults aged between 18 and 29 inclusive. Notably, the Spend&Save rate of 2.75 percent is the second highest on the market in this category.

Source: RateCity.com.au. Note: conditions and balance caps apply for maximum rate on select accounts

NAB: today’s savings changes

After hiking its Reward Saver by 0.50 percentage points last Friday, NAB has today again increased the rate on this account by another 0.25 percentage points to a maximum ongoing rate of 1.25 per cent. The maximum rate on this account has now gone up by 0.75 percentage points this month.

The bank has also increased the ongoing rate on its iSaver account by 0.05 percentage points and increased the bonus intro rate for new customers by 0.50 per cent.

Source: RateCity.com.au. Note: conditions and balance caps apply for maximum rate on select accounts.

RateCity.com.au analysis of savings rates

• 49% of banks have so far hiked at least one savings account following the July cash rate hike.
• 0.39% is the average hike (RBA hiked by 0.50%).
• 13 banks now have ongoing savings rates of 2% and over for all adults (there were 0 in April 2022)

RateCity.com.au research director, Sally Tindall, said: “Competition is forcing the big four banks to lift their game after more than two years of woeful savings rates.”

“After three months of hikes from the RBA, Westpac has finally decided to pick its eSaver rate off the floor – but not by much. It’s moved to an ongoing rate of 0.30 per cent for existing customers,” she said.

“By contrast Westpac has the second-highest ongoing rate for young adults at 2.75 per cent for balances up to $30,000. This is a decent rate in this market if you’re lucky enough to qualify.

“NAB has made the surprise decision to increase its Reward Saver for a second time this month, taking the total hike to 0.75 percentage points for July, which is above the RBA hike. However, at a max rate of 1.25 per cent, NAB’s Reward Saver still falls well below the market leaders.

“While it’s great to see savings rates getting a boost, many banks are still only hiking select accounts. Analysis of the RateCity.com.au database shows the average saving rate increase following the July RBA hike is 0.39 percentage points, which falls short of the 0.50 percentage point cash rate increase.

“Savings rates are on the move, making it difficult to keep track of what a decent rate is. In this environment, people should do a health check on their account at least once every couple of months,” she said.

Source: RateCity.com.au. Note: conditions and balance caps apply for maximum rate on select accounts.* A rate lock of 32 days is required for the max Virgin rate.

Big four banks – BONUS SAVERS

Source: RateCity.com.au. Conditions for max rate apply

Big four banks – ONLINE SAVERS

Source: RateCity.com.au.

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