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Macquarie Bank cuts savings rates, joins 50 lenders who’ve cut in 2021

Macquarie Bank cuts savings rates, joins 50 lenders who’ve cut in 2021

Macquarie Bank has today revealed changes to its popular savings account, with cuts of 25 basis points in effect across its tiered variable account.

The previous ongoing rate (base rate) on offer from Macquarie Bank for balances of $0 - $249,999.99 was 1.20 per cent. It has now been slashed to 0.95 per cent.

Macquarie savings account changes:

Account balanceOld variable interest ratesNew variable interest rates
$0 and $249,999.991.20%0.95%
$250,000 and $999,999.990.95%0.70%
$1,000,000 and above0.95%0.70%

Macquarie Bank’s introductory savings account still offers a competitive 1.10 per cent for the first 4 months. However, as one of the few savings accounts offering ongoing rates above 1 per cent, this news may come to the surprise of some customers.

Macquarie Bank joins the ranks of 50 other savings account providers who’ve cut interest rates since 1 January this year, according to RateCity research. There have been 171 changes to savings accounts in 2021, with only one being a rate increase.

Why are savings rates so low?

The decline of savings account interest rates in Australia has been an ongoing process, with three Reserve Bank of Australia cash rate cuts in 2020 influencing the low-rate environment.

Strict stay at home regulations due to Covid-19 also meant that many Australians were no longer spending money at the same rate. In fact, we’re squirrelling away more savings than we have in recent years.

The latest APRA Household Deposit data shows that the banks currently hold over $1.1 trillion in deposits from households. Over the course of 2020, Australians have increased their deposits by $125 billion, or 12.65 per cent.

Deposits by households $1,112,871,900,000$1,112,597,200,000$998,739,600,000$987,914,700,000
MoM/cumulative change ($) /$274,700,000$114,132,300,000$124,957,200,000
MoM/cumulative change (%) /0.02%11.43%12.65%

Source: APRA Household Deposits, RateCity.com.au.

What that means for your savings account is that the increasing size of household deposits puts pressure on the banks, who need to pay interest on said growing nest-eggs. This, paired with an already low-rate environment, means that savings account providers are more inclined to not only cut interest rates, but cut them out-of-cycle with the RBA.

RateCity research found that since pre-Covid-19 regulations (1 March 2020), the average savings account rate has fallen from 0.86 per cent to 0.36 per cent today (26 February 2021). This is a decrease of 50 basis points.

Who is still offering a high interest savings account?

There are still a range of savings account providers offering customers competitive interest rates. However, you may need to consider switching from the bank you’ve been with since you were a kid to nab one of these interest rates.

Some savings accounts offer bonus interest rates for those willing to meet certain conditions, such as depositing a certain amount each month or making no withdrawals.

You may also find a competitive rate with introductory ‘standard’ savings accounts, which offer high introductory rates for a set period of time that then revert to a lower ongoing rate.

Highest ongoing savings accounts on RateCity database

BankAccountMax rate
INGSavings Maximiser


MyState BankBonus Saver Account


86 400Save Account


ME BankOnline Savings Account




Source: RateCity.com.au. Data accurate as of 26.02.2021. Conditions apply for max interest rate.

Highest standard savings rates on RateCity database

BankProductIntro rate (4 months)Ongoing rate
Rabobank AustraliaHigh Interest Savings Account



Heritage BankOnline Saver



Macquarie BankMacquarie Savings Account



CitiOnline Saver



Source: RateCity.com.au. Data accurate as of 26.02.2021.

Unfortunately, wherever you look, savings account interest rates are continuing to decline. If you’re hoping to earn a high rate of return on your savings, you may need to consider either constantly comparing your options and account hopping, or even investigating other investment options for 2021.

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.



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Learn more about savings accounts

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.

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

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.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

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.

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.

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.

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. 

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

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.

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. 

What are the requirements of an ING Bank locked savings account?

An ING bank locked savings account - also called a term deposit - offers you interest in exchange for holding your money for a period of time.

The terms offered include as little as 90 days or as long as two years. Generally, the longer you lock your money away, the higher the rate of interest. 

The minimum deposit amount for an ING locked savings account is $10,000. 

To be eligible to apply, you must: 

  • Be an Australian resident for tax purposes
  • Be aged 13 years or older
  • Hold the account for personal use (ING offers business term deposits as a separate product). 


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.