These banks both previously offered some of the highest interest rates for savers on the market.
UBank's USave + USpend account has had its total interest rate cut from 1.60% p.a to 1.46% p.a, a cut of 14 basis points.
Neobank 86 400 meanwhile sent a note to customers today saying its Save account rate is changing on Tuesday 13 October, going from 1.60% p.a to 1.35% p.a - a 25 basis point cut in total.
The UBank 1.46% p.a savings rate comes with a 1.06% p.a bonus rate and a 0.40% p.a base interest rate.
The eligibility to earn the bonus rate remains unchanged, requiring customers to:
- Open a USave savings account;
- Link a USpend transaction account; and
- Deposit at least $200/mth from a non-UBank account
For 86 400 meanwhile, the base rate has been changed to 0.10% p.a (down from 0.15% p.a) with a bonus rate of 1.25% p.a, down from 1.45% p.a
To get the bonus interest rate customers need to deposit $1,000+ per month into any Pay or Save accounts.
"We know low interest rates make it hard when you’re saving for a goal – we’re savers too. We'd much prefer to be telling you about some great new features rather than reducing our Save rate but that’s not the economic environment we’re in right now," 86 400 said.
"We remain committed to changing the way banking is done in Australia and providing you with great rates over the long-term for both your savings and home loan."
Effective Sunday 1 November 2020, the maximum balance eligible to earn 86 400's highest rate on its Save account will also be reduced from $100,000 per account to $50,000 - a maximum of $150,000 across three accounts (down from $300,000).
86 400 & UBank among several banks to cut interest rates recently
These two banks aren't the only ones to have slashed savings account interest rates lately. They've just joined an ever-growing list.
Notable savings account rate cuts to take place in recent weeks include:
- Xinja dropping its 'Stash' interest rate to 1.50% p.a from 1.65% p.a
- Up Bank slashing its Up Saver interest rate by 50 basis points to 1.10% p.a;
- ING cutting the interest rate on its Savings Maximiser account to 1.50% p.a from 1.65% p.a;
- Neobank Volt, still in beta, cutting the total interest rate on its savings account by 20 basis points from 1.65% p.a. to 1.45% p.a;
- The CUA eSaver Reward account was cut to a maximum rate of 1.45% p.a. after having a total rate of 1.70% p.a in April.
- RAMS, which once boasted one of the highest savings account interest rates around, has now been cut to a total 0.90% p.a
Westpac and Commonwealth Bank also made 15 and 5 basis point cuts to their savings account rates respectively.
[Read: Westpac to offer 3% savings rate to under-30s]
These latest changes by two of the market's leading savings account interest rate holders could be yet another indication that the Reserve Bank is set to cut the cash rate by 15 basis points next month.
Economists from NAB, Westpac and 14 of 24 Bloomberg-polled analysts all expect the RBA to cut the cash rate by 15 basis points in November.
Denise Raward
Harrison Astbury
