Westpac the last of the big four to cut

Westpac the last of the big four to cut

Westpac has today dropped the interest rate on its savings accounts; the last of the big four banks to pass on cuts to savers this month. 

Westpac has cut bonus rates by 0.25 per cent on the eSaver and Life accounts, while cutting the base rates by 0.05 per cent and 0.15 per cent, respectively.

The changes have been made across the Westpac Group, including St George, Bank of Melbourne and BankSA, all of which have cut bonus rates by up to 0.25 per cent.

Westpac savings rate changes

 

Intro rate - 5 months

Ongoing rate

 

Old rate

New rate

Change

Old rate

New rate

Change

eSaver

1.91%

1.66%

-0.25%

0.15%

0.10%

-0.05%

Note: The bonus interest rate is for the first 5 months.

 

Max rate

Base rate

 

Old rate

New rate

Change

Old rate

New rate

Change

Life

1.90%

1.65%

-0.25%

0.60%

0.45%

-0.15%

Note: To earn the maximum rate on this account the balance must be higher at the end of each month than the beginning. The max rates include the bonus and base interest rates.

Last Friday, ANZ and NAB both cut their bonus savings rates by 0.25 per cent, leaving base rates unchanged.

The week before, CBA lowered the base rate on its Net Saver account by 0.05 per cent, and made cuts of up to 0.35 per cent on its bonus savings rates.

In total, 48 banks have dropped savings rates since the RBA cut the cash rate on 1 October.

State of play – big four conditional savings accounts

These accounts require you to meet certain terms and conditions, such as one deposit a month and no withdrawals, in order to qualify for the bonus interest that month.

 

Max Rate

Base Rate

CBA Goal saver

0.90%

0.01%

Westpac Life

1.65%

0.45%

NAB Reward saver

1.61%

0.11%

ANZ Progress saver

1.60%

0.01%

Source: RateCity.com.au.

Note: The max rate includes the bonus and base interest rates. The rates are based on balances less than $50,000. CBA offers higher rates for larger deposits.

State of play – big four standard savings accounts 

These accounts typically include an introductory period which offers bonus interest for several months, before dropping to a low ongoing rate.

 

Intro rate

(3-5 months)

Ongoing rate

CBA Netbank

1.65%

0.10%

Westpac eSaver

1.66%

0.10%

NAB iSaver

1.86%

0.11%

ANZ Online Saver

1.60%

0.10%

Source: RateCity.com.au

Note: The intro rate periods are as follows: CBA 5 mths, Westpac 5 mnths, NAB 4 mths, ANZ 3 mths.

Sally Tindall, research director at RateCity.com.au, said people with conditional savings accounts would be hurt the most by the cuts.

“Earnest savers have borne the brunt of this round of rate cuts, with all four of the big banks slashing their conditional saver rates by 0.25 per cent,” she said. 

“Meanwhile, big four customers with a standard savings account have come out relatively unscathed, largely because their ongoing rates are already 0.11 per cent or less.

“There are still savings rates as high as 2.25 per cent, so it’s worth shopping around.

“But with another RBA cut looming, savers should expect rates to fall further,” she said.

Highest conditional savings rates on RateCity.com.au

Bank

Max rate

Conditions

86 400

2.25%

Deposit $1K /mth

Australian Unity

2.25%

$250/mth

MyState Bank

2.25%*

$20/month & 5 or more transactions on linked account

RAMS

2.25%

$200/mth & no withdrawals

Up

2.25%

5 or more transactions on linked account

Notes: excludes kids savers and introductory rates.

*The interest rate offered by MyState Bank is currently 2.50%, but will change to 2.25% on 1 November.

Did you find this helpful? Why not share this news?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about savings accounts

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

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 is a good interest rate for a savings account?

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 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:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

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.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

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.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

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.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

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.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

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 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.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.