NAB-owned Ubank has alerted customers its high interest savings account bonus rate will drop 0.25% p.a. to 4.85% p.a. from Tuesday 27 May.
The rate of 5.10% p.a. had been among several on the market above 5%, although many banks are yet to pass on last week's Reserve Bank 0.25% cut to the cash rate.
See also: Which banks are lowering savings account rates after the RBA's May rate cut?
Ubank's bonus rate will fall to 4.85% p.a. on Save balances up to $100,000 and 4.40% p.a. for amounts between $100,000 and $250,000, (down from 4.65% p.a.).
To earn bonus interest, Ubank customers need to deposit $500 or more per month into any Save, Spend, or Bills account (excluding internal transfers).
While Ubank is far from alone in cutting below the vaunted 5% threshold, it could be seen as a canary in the coalmine for what's to come, owing to its popularity.
Half-year results released by NAB earlier in the month show Ubank customer numbers grew 16% in a year, now at nearly one million, while its deposit book grew 11.5% to $21.4 billion.
What is the highest savings interest rate?
Some market leaders are yet to adjust rates to their savings products, according to the Savings.com.au database.
ING is still offering a top rate of 5.40% p.a. on its Savings Maximiser account although there are a few more hoops to jump through to achieve the 5.35% p.a. bonus rate.
They include depositing at least $1,000 a month from an external source to an eligible ING personal account and making at least five card purchases using an ING debit or credit card.
Savings Maximiser account balances must also be higher than they were the previous month to qualify for the bonus interest (but interest payments are not counted).
Other contenders
Last week, Rabobank passed on a 0.30% cut to its top rate - the four-month introductory rate on its High Interest Savings Account for balances up to $250,000 is now 5.15% p.a.
The rate reverts to an ongoing variable rate of 3.70% p.a.
The rate cuts took effect Friday morning yet customers weren't notified by email until after 5pm that day.
Bankwest is matching Rabo's introductory rate of 5.15% p.a. for four months on amounts up to $249,999 with the rate reverting to a higher 3.85% p.a.
Many banks and lenders are quick to pass on cash rate cuts on home loan products in the interests of public relations while cuts to savings account rates tend to happen with less fanfare.
As of midday Monday 26 June, two of the major banks CommBank and ANZ are yet to announce changes to interest rates on their savings account products.
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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.
- Bonus rate for the first 4 months from account opening
- No account keeping fees
- No minimum balance
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Denise Raward
Jacob Cocciolone
