The new top rate will become 5.00% p.a. - a 0.40% drop.
The base rate will remain at 0.05% while the bonus rate, currently at 5.35% p.a., is to drop down to 4.95% p.a..
While cuts to savings account rates were inevitable after the May cash rate cut, many ING customers will feel aggrieved at the extent of the cut, significantly larger than the 0.25% from the RBA.
However, after the February cash rate cut, ING only cut by 0.10%, so it does work out to be the appropriate 50 bps cut across both.
ING's other savings account offering, the Savings Accelerator, will have rates reduced by 0.25%, taking the four month introductory rate down to 4.90% p.a.
How much will customers lose?
Let's take some hypothetical customer depositing the minimum $1,000 each month - here's how much this reduces their earnings by over the next year:
Starting balance Interest earnings at 5.40% (compounding) Interest earnings at 5.00% p.a. (compounding) Difference $0 $301.5 $278.86 -$22.64 $20,000 $1,408.64 $1,302.09 -$106.55 $100,000 $5,837.18 $5,395.05 -$442.13 Savings account interest is also taxed at the customer's marginal income tax rate.
A slap in the face for savers?
While this latest announcement doesn't look great, 50 basis points' worth of cuts since the February RBA announcement is what you would expect from savings account providers.
Australian savers will nonetheless be mourning the demise of yet another standout return, this announcement following cuts from UBank and Macquarie Bank.
The top rate in our database is now the MOVE Bank growth saver at 5.25% p.a., although with MOVE yet to make an announcement following the cash rate cut, this return may not be around for much longer either.
Read more: All the savings account announcements so far
ING Savings Maximiser bonus conditions
Even after this latest cut, the new top ING Savings Maximiser rate is still one of the few products to still offer a return beginning with a 5.
The 4.95% p.a. bonus rate is available to customers who:
- Deposit at least $1,000 each month from an external source to any personal ING account in their name, and;
- Make at least five settled card purchases, and;
- Grow their nominated Savings Maximiser balance (excluding interest)
The top rate is available on balances up to $100,000
Read more: ING Savings Accounts
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Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.
Image from Ingo Stiller on Unsplash
Denise Raward
Harry O'Sullivan
