The major bank's full-year results released today revealed $175 billion out of $369 billion in bank deposits - that's transaction accounts, term deposits and savings accounts - are earning less than 0.25% p.a in interest.
Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.
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 October 23, 2024. View disclaimer.
Over one fifth (22%) of NAB's deposits earn less than 0.01% p.a - basically nothing - while 25% earns between 0.01% and 0.25%.
Only $42.5 billion, or 11.5%, earns above 1% p.a, something that would have seemed unfathomable just a few years ago.
As of September 2020, $121 billion of these deposits are in transaction accounts, which historically tend to earn little to no interest, but a further $217 billion is deposited in either savings accounts or term deposits, which do earn interest.
Source: NAB
NAB's figures sum up a dismal deposit market
NAB's showcase of its deposits earning little to no interest could be emblematic of the market as a whole, as NAB has the third-most customer deposits in the entire market according to regulator monthly banking statistics.
The second biggest, Westpac, revealed it has $550 billion in deposits in its own full-year results as at September 2020.
According to Westpac, 41% of these deposits are earning below 0.25% p.a, down from 33% in late March.
Source: Westpac
ANZ meanwhile, the fourth biggest bank in terms of deposits, reported $179 billion worth of <0.25% p.a deposits in its full-year results, a near 20% increase from March to September 2020 and a more than 60% increase from September 2019.
Source: ANZ
Australia's largest bank by deposit size, Commonwealth Bank, did not reveal an interest rate breakdown in its full-year results, but did say its deposit funding has increased from 69% in 2019 to 74% in 2020, now having more than $580 million in deposits as of September.
Deposits overall have increased among every major bank over the last several years, as well as across most other banks.
The COVID-19 pandemic exacerbated this trend. From March to June, when pandemic fears were at its peak, household deposits rose by 6.4%, or $64 billion, indicating a stockpiling of cash.
This is a huge problem for those who rely on these deposits to earn an income, as deposit interest rates have plunged over the past year.
Prior to the June 2019's cash rate cut - the first in several years - the average term deposit rate across all terms offered on the market for a $10,000 deposit was around 2.30% p.a.
This has made things even harder for savers, and Reserve Bank Governor Philip Lowe said those hardest-hit needed to carry a "heavy share of the burden for the collective good".
"In reaching today's decision, the Board also considered the effects on medium-term financial and macro stability as well as the impact on savers," Mr Lowe said.
"The Board recognises that low rates can encourage some additional risk-taking, as investors search for yield. It also recognises that low deposit rates can create difficulties for some people.
“Lower rates will help support spending and ultimately will create jobs, so the broader community will benefit from today’s decision."
Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory interest rates on the market.
Special offer: Savings Accelerator (Kick Starter offer).
For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
FEATURED
Savings Accelerator
Special offer: Savings Accelerator (Kick Starter offer).
For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
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 October 23, 2024. View disclaimer.
Savings.com.au provides general information and comparison services to help you make informed financial decisions. We do not cover every product or provider in the market. Our service is free to you because we receive compensation from product providers for sponsored placements, advertisements, and referrals. Importantly, these commercial relationships do not influence our editorial integrity.
At Savings.com.au, we are passionate about helping Australians make informed financial decisions. Our dedicated editorial team works tirelessly to provide you with accurate, relevant, and unbiased information. We pride ourselves on maintaining a strict separation between our editorial and commercial teams, ensuring that the content you read is based purely on merit and not influenced by commercial interests.
Learn more about our commitment to editorial integrity in our Editorial Guidelines.
Our service is free for you, thanks to support from our partners through sponsored placements, ads, and referrals. We earn compensation by promoting products, referring you, or when you click on a product link. You might also see ads in emails, sponsored content, or directly on our site.
We strive to cover a broad range of products, providers, and services; however, we do not cover the entire market. Products in our comparison tables are sorted based on various factors, including product features, interest rates, fees, popularity, and commercial arrangements.
Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes.
Additionally, certain products may present forms designed to refer you to associated companies (e.g. our mortgage broker partner) who may be able to assist you with products from the brand you selected. We may receive a fee for this referral.
You can customise your search using our sorting and filtering tools to prioritise what matters most to you, although we do not compare all features and some results associated with commercial arrangements may still appear.
For home loans, the base criteria include a $400,000 loan amount over 30 years. For car loans, the base criteria include a $30,000 loan over 5 years. For personal loans, the base criteria include a $20,000 loan over 5 years. These rates are only examples and may not include all fees and charges.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Monthly repayment figures are estimates that exclude fees. These estimates are based on the advertised rates for the specified term and loan amount. Actual repayments will depend on your circumstances and interest rate changes.
Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.
Savings.com.au is proudly part of the InfoChoice Group, which includes InfoChoice.com.au, YourMortgage.com.au, YourInvestmentPropertyMag.com.au, and PerformanceDrive.com.au. The InfoChoice Group is associated with the Firstmac Group.
We may include products and services from loans.com.au, CarLoans.com.au, OnlineAuto.com.au, and YourMortgageBroker Pty Ltd, all associated with the Firstmac Group. Importantly, these brands are treated like any other commercial partner.
The information provided by Savings.com.au is general in nature and does not take into account your personal objectives, financial situation, or needs. We recommend seeking independent financial advice before making any financial decisions. Before acquiring any financial product, obtain and read the relevant Product Disclosure Statement (PDS), Target Market Determination (TMD), and any other offer documents.
Rates and product information should be confirmed with the relevant credit provider. For more information, read Savings.com.au’s Financial Services and Credit Guide (FSCG).
Harry O'Sullivan
Denise Raward
