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The savings accounts with higher interest rates than home loans
While home loan interest rates have plunged to as low as 2.09 per cent, some banks have lifted their short-term savings rates to as high as 2.65 per cent for new customers.
Today AMP raised its introductory savings rate by 0.54 per cent to 2.65 per cent. The variable introductory rate is for 6 months, after which time it drops to 1.05 per cent.
Macquarie Bank is also offering a variable introductory rate of 2.65 per cent for the first four months and an ongoing rate of 1.35 per cent.
While the introductory savings rates only last for between four and six months for new customers, it’s unusual to see banks offering higher savings rates than some of their home loan rates.
Highest introductory savings account rates on RateCity
| Bank | Account | Intro rate | Intro term | Ongoing Rate | Notes |
| Macquarie Bank | Savings Account | 2.65% | 4 months | 1.35% | On balances up to $250k |
| AMP | Saver Account | 2.65% | 6 months | 1.05% | On balances up to $500k |
| Heritage Bank | Online Saver | 2.30% | 4 months | 0.90% | On balances up to $100k |
| Rabobank | High Interest Savings Account | 2.25% | 4 months | 0.80% | On balances up to $250k |
Source: RateCity.com.au. Note: Rates accurate as of 27.03.2020
However, it’s not all good news for savers with over 60 banks cutting savings rates this month.
Among those are neo-bank market leaders 86 400 and Up, while Xinja has suspend its savings account for new customers.
Highest ongoing savings account rates on RateCity
| Bank | Max rate | Base rate | Conditions for max rate |
| MOVE Bank | 2.00% | 0.80% | Deposit $200+ per mth, no withdrawals |
| 86 400 | 2.00% | 0.40% | Deposit $1,000+ per mth |
| MyState Bank | 2.00% | 0.30% | Deposit $20+ per mth and 5 purchases from linked trans account |
| Up | 2.00% | 0.25% | 5+ purchases per mth from linked trans account |
| BOQ | 2.00% | 0.20% | Deposit $1K + 5 trans into linked account per mth |
Source: RateCity.com.au. Note: Rates accurate as of 27.03.2020
RateCity research director Sally Tindall said: “It’s hard to believe we’re seeing savings rates that are higher than some fixed home loan rates, even if they are only for a short time.”
“Although it’s positive to see some banks offering relatively high introductory rates, it’s the ongoing savings rates that are most crucial in the long run.
“Serious savers who are making regular deposits can still get ongoing interest rates of 2 per cent, if they shop around,” she said.
Interestingly, CBA cut the introductory savings rate on its popular NetBank savings account yesterday by 0.25 per cent. Australia’s biggest bank is now offering 1.05 per cent for the first five months on its NetBank saver account, after which time it drops to an ongoing rate of just 0.05 per cent.
“With rates that low, the NetBank saver is little more than a safe place to park your cash.
“With banks moving deposit rates in different directions, now is a good time to take stock of your savings and make sure you’re getting the most out of the cash you have in the bank,” she said.
Disclaimer
This article is over two years old, last updated on March 27, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent savings accounts articles.
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Product database updated 27 Apr, 2024
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