Savings rates are starting to feel the squeeze following last week’s RBA cut, with ING and ME Bank dropping rates by the full 0.15 per cent on their popular savings accounts today.
The question now is whether the big four banks will do the same.
From today, ING has dropped the rate on its Savings Maximiser, taking it from 1.50 per cent down to 1.35 per cent. This is despite the fact the bank chose not to pass on a rate cut to its existing variable home loan customers, opting to cut fixed mortgage rates instead. Their savings rate is still, however, the second highest in the market.
ME Bank has also cut the maximum rate on its Online Savings Account by 0.15 per cent, down to 1.20 per cent. However ME Bank did pass the rate cut on to its variable mortgage customers.
Since last Tuesday’s cash rate announcement, nine banks have cut at least one of their savings rates, bringing the average ongoing savings rate on the RateCity.com.au database down to just 0.49 per cent. This could drop to below 0.40 per cent in the next few months as the impact of the RBA cut filters through to many savings accounts.
ING rate change
|Savings Maximiser||Old rate||New rate||Difference|
ME Bank rate change
|Online Saver||Old rate||New rate||Difference|
Sally Tindall, research director at RateCity.com.au, said today’s savings cuts from ING and ME Bank were a sign of what’s to come.
“It’s disappointing to see two of the highest ongoing savings rates get the chop, but it’s really only a matter of time before more banks start handing down this latest RBA cut,” she said.
“The big four banks have made multiple cuts to their savings rates over the last six months – it will be interesting to see if they go again.
“Australia’s biggest banks already offer an ongoing savings rate of just 0.05 per cent on their standard savings account. They won’t want to cut this rate down to zero, but it could happen.
“Savers should keep a keen eye on their account over the next few weeks to see if their rate gets cut. There’s a real chance a handful of banks will drop their base rates to zero, leaving some customers empty handed.
“Hitting rock bottom might, at the very least, convince some people to seek out a better savings account,” she said.
Highest conditional ongoing savings rates on RateCity.com.au
|MyState Bank||Bonus Saver Account|
|86 400||Save Account|
|UBank||USave with USpend|
Source: RateCity.com.au. Conditions apply for max interest rate.
Highest standard savings rates on RateCity.com.au
|Bank||Product||Intro rate (4 months)||Ongoing rate|
|Rabobank Australia||High Interest Savings Account|
|Heritage Bank||Online Saver|
|Macquarie Bank||Macquarie Savings Account|
|HSBC||Serious Saver Account|