Mortgage rates aren't the only interest rates on the way up following the RBA's first cash rate increase in over a decade, with Westpac and NAB the first of the big-four to signal an increase to savings account rates.
Westpac
Westpac will lift rates on its 'Westpac Life', 'Westpac 55+ and Retired' products by 25 basis points from 17 May 2022.
Westpac's new savings account rates are as follows:
- Westpac Life Savings Account will increase up to 0.50% p.a.
- Westpac 55+ and Retired Savings Account with balances from $0 to less than $9,999 will increase up to 0.30% p.a.
- Westpac 55+ and Retired Savings Account on the part of the balance from $9,999 to less than $49,999 will increase up to 0.30% p.a.
- Westpac 55+ and Retired Savings Account on the part of the balance from $49,999 to less than $249,999 will increase up to 0.35% p.a.
- Westpac 55+ and Retired Savings Account on the part of the balance from $249,999 and over will increase up to 0.50% p.a.
Westpac Chief Executive Consumer & Business Banking Chris de Bruin said this will provided much needed relief for savers following a lengthy period of record-low interest rates.
NAB
NAB will lift rates on its 'Reward Saver' product offering by 25 basis points from 13 May 2022.
This increase will see NAB's Reward Saver Savings Account rate lift up to 0.50% p.a.
"The historic low interest rates have been difficult for our savings and deposit customers, including more than 1.3 million customers with a reward saver account. We want to support them as interest rates rise again," said Rachel Slade, NAB's group executive of personal banking.
Savers lured by alternative methods
Despite a savings account rate increase, Aussies are tipped to continue to search for alternate savings methods to maximise their potential returns.
Charlie Karaboga, CEO and co-founder of blockchain powered fintech Block Earner, said for savers the RBA’s 25 base point increase won't close the 5.1% inflation gap.
"Unfortunately Australia’s inflation woes are largely being caused by factors outside of the country, like the Ukraine war, and so a rise in interest rates is unlikely to bring inflation down for some time," Mr Karaboga said.
"Although the rate announcement is a step in the right direction, it shines a light on the archaic and outdated systems through which Australians are expected to save for major life milestones like retirement, breaking into the housing market or getting married.
"As inflation and interest rates continue to rise, now is the time for Australians to reconsider their investment strategies — by spreading their nest eggs more equally between the traditional and decentralised finance worlds.
"This is game changing particularly for millennials who have struggled to get a leg up on the property ladder, and who will continue to do so if they are not exposed to a more diverse set of savings and investment opportunities."
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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.
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Harry O'Sullivan
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