Saving slowed over Christmas, but Aussies squirrelled away $100b

Saving slowed over Christmas, but Aussies squirrelled away $100b

The rate of savings slowed in November according to the latest data from the Australian Prudential Regulation Authority (APRA), as millions of Aussies undoubtedly spent more on groceries and gifts in the lead up to Christmas.

However, since COVID-19 first hit Australia (March 2020 - November 2020), APRA data shows that Aussies have managed to squirrel away over $100 billion in deposits.

Strict stay-at-home regulations, paired with overall uncertainty in household budgets, means many have been either able to save more, or pressured to save more, than ever before.

Deposits by households: November 2019 – November 2020

  Nov-2020 Oct-2020 Mar-2020 Nov-2019
Deposits by households





MoM/cumulative change ($)  




MoM/cumulative change (%)  




Source: &

The fallout of this increase in savings has potentially led more banks to cut interest rates out of cycles, as banks are being flooded with cash that they cannot afford to pay interest on.

While the Reserve Bank of Australia (RBA) did cut the cash rate to a record-low of 0.10 per cent in November, many banks still passed on additional cuts to their deposit customers. Australia’s biggest bank, Commonwealth Bank, passed on a second rate cut to its NetBank saver and GoalSaver accounts in mid-December.

RateCity research found that 11 banks have made out-of-cycle rate cuts in the first eight days of January alone.

Further, RateCity research found that the average highest rate you can now earn as a saver has plunged well below 1 per cent. The average maximum rate for conditional savings accounts is now 0.71 per cent, and the average maximum rate for introductory accounts is only 0.88 per cent.

If your bank is making frequent out-of-cycle rate cuts, it’s worth considering this a sign to perform a financial health check on your savings account to ensure it’s still the most competitive option for your financial needs.

Four banks still hold the biggest piece of the pie

Australia’s big four banks – CBA, Westpac, ANZ and NAB – still hold the largest market share of deposits by households, according to APRA data.

CBA leads the country’s bank with a 27.15 per cent share, totalling over $298 billion in November. But while Westpac retained its second-place position, its deposits dropped $371 billion in November.

Top 15 Banks by deposit size (deposits by households)

Position Institution Name Deposits by households (Nov 2020) % of deposits (Market Share) Deposits by households (Oct 2020) MoM change in total deposits ($) MoM change in total deposits (%)


Commonwealth Bank of Australia







Westpac Banking Corporation







National Australia Bank Limited







Australia and New Zealand Banking Group Limited







ING Bank (Australia) Limited







Bendigo and Adelaide Bank Limited







Suncorp-Metway Limited







Macquarie Bank Limited







Bank of Queensland Limited







HSBC Bank Australia Limited







Credit Union Australia Ltd







Members Equity Bank Limited







Newcastle Permanent Building Society Limited







Teachers Mutual Bank Limited







Heritage Bank Limited






Source: &

APRA data also found that some neobanks in Australia may be on shaky ground. Judo Bank, which boasts one of the most competitive term deposit rates on the market, has continued its steady increase in deposits. It boasted a deposit (by household) amount of $1.2 billion in November 2020. While this only represents 0.11 per cent of the market, it’s a deposit increase month-on-month from October of 5.4 per cent.

However, both Volt and Xinja experienced decreases in November - the latter of which in December announced it was returning its banking licence and all deposits to account holders. Prior to November, these neobanks had previously recorded monthly increases to their deposit books.

It’s worth wondering if some Xinja customers in November acted pre-emptively, sensing a change was coming. Further, with Volt still in ‘beta testing’ for some time now, some customers may have lost hope and considered switching account providers.

Tips for Aussie savers looking for new deposit accounts

Whether you love to lock in a competitive rate with a term deposit or prefer the flexibility of a savings account, there are a few tried-and-true tips worth considering when comparing your options.

  1. Know the ongoing interest rate, not just the introductory rate to get you in the door.
  2. Research what fees are involved, whether you can afford them, and if they outweigh the interest you may earn.
  3. Check what conditions, if any, are required of you to earn the highest ongoing interest rate.
  4. Look outside of your childhood bank. The most competitive interest rates generally come from competitor deposit providers, so it’s worth doing your research.

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Learn more about savings accounts

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.

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

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.

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.

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.

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 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)

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

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. 

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.

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.

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.

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 does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.