The federal government will introduce legislation to force banks to be clearer on basic deposit products that promise 'bonus' or higher rates of interest but have complex terms and conditions for achieving it.

The announced changes are in response to two separate inquiries into the banking sector by the Australian Competition and Consumer Commission over the past five years.

In the latest review, the ACCC found customers were most confused by so-called 'bonus accounts' with 71% of customers holding such accounts consistently missing out on bonus rates.

In December, the ACCC reported Australians were being short-changed billions of dollars in interest on their savings held in a complex network of more than 900 transaction and savings accounts heavily weighted at luring new customers at the expense of existing depositors.

The competition watchdog noted the terms and conditions for some accounts ran up to 108 pages.

Changes to home loan switching

Under the proposed new changes, banks will also need to provide simpler information to home loan customers so they have a clearer picture on whether they'd be better off switching to another lender.

This would also include providing direct and easy access to simplified paperwork for people wanting to change lenders.

The measure is in response to an earlier ACCC report, released in 2020, that found borrowers struggled to navigate the complex system of switching to cheaper loans which could often take weeks or months.

However, the report came out before the surge of borrowers refinancing in the wake of the pandemic as mortgage holders came off fixed-rate home loans, seeing a 14% jump in refinanced home loans in the 2023 financial year.

At the time, the flurry prompted lenders to court refinancers with cashback offers and purported 'easy switch' terms.

The ACCC had called on refinancing to be completed in 10 business days, but this suggested deadline has not been included in the reforms.

See Also: The Refinancing Process & Costs

Government forcing better competition

Federal treasurer Jim Chalmers said the changes are needed to help Australians get better rates on their mortgages and savings accounts.

"They will help create a more dynamic, diverse and resilient Australian banking sector, which is good for consumers, good for industry and good for the economy," he said.

The latest Australian Prudential Regulation Authority (APRA) figures showed Australian banks currently hold $3 trillion in deposits and $2.2 trillion in residential mortgages in the March quarter.

Dr Chalmers also announced a review into challenges faced by small and medium sized banks in providing competition in the sector.

The ACCC concluded the lack of competition in banking was a key reason customers were losing out in both the deposit and lending markets.

The review, to be led by the Council of Financial Regulators (which includes the RBA, ASIC, and APRA, and Treasury) and the ACCC, will consider how regulation could help smaller banks source funding to better compete with the big four.

The government changes will also require financial product comparison websites to better disclose how their products are ranked as well as the financial relationships they may have with product providers.

Changes don't go the whole way

The reforms, announced at the weekend, fall short on some of the ACCC's recommendations.

In its savings recommendations, the ACCC suggested banks should actively inform customers to switch to products with better rates if they were available and warn them if they were about to breach their bonus rate terms.

It had also recommended banks send annual personalised correspondence to costumers outlining how they could get a better home loan deal.

The government's promised to "work with banks" on further measures.

There is also no timeline as to when the changes will be implemented.


Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Update resultsUpdate
BankSavings AccountBase Interest Rate Max Interest Rate Total Interest Earned Introductory Term Minimum Amount Maximum Amount Minimum Monthly Deposit Minimum Opening Deposit ATM Access Joint Application TagsFeaturesLinkCompare
4.40% p.a.
5.75% p.a.
Intro rate for 4 months
then 4.40% p.a.
4 months
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
1.20% p.a.
Bonus rate of 4.20%
Conditions apply.
5.40% p.a.
4.75% p.a.
5.35% p.a.
Intro rate for 4 months
then 4.75% p.a.
4 months
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Bonus rate of 5.50%
Conditions apply.
5.50% p.a.
Featured *Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

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