The RBA increased the cash rate by 25 basis points to 4.35% in November, the first increase in four months.
Many banks will pass on this rate hike to depositors, hoisting savings interest rates higher. RateCity’s database shows eight banks with maximum interest rates of at least 5.50%, while a host of others are offering rates above 5%.
Greater competition for deposits could see more banks offering even greater returns once the hike is passed on. Economists and analysts also suggest there may be another rate hike before the end of the year. If it does come off, it’s likely to be the last increase in this tightening cycle. This means that the cash rate may officially peak at either 4.35% or 4.60% in 2023, before possible cuts in 2024.
With this in mind, you may want to carefully consider whether a savings account or a term deposit may be the best solution to help you reach your saving goals. Term deposits can offer stability, but a savings account could provide more flexibility.
If you feel like you're missing out on a higher rate and want to see how your existing savings account stacks up, compare some of the savings accounts with the highest rates on the RateCity database:
- Rabobank High Interest Savings Account - 5.60%
- Hiver Target Saver - 5.50%
- Move Bank Growth Saver Account – 5.50%
- Teachers Mutual Bank Target Saver - 5.50%
- Firefighters Mutual Bank Target Saver - 5.50%
Updated by Peter Terlato on 7 November 2023.