According to Up, from 1 November 2020 it will be lowering the maximum interest rate on its Up Saver account to 1.10% p.a, down from 1.60% p.a which was last changed in July this year

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory and introductory interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

Savings Maximiser (<$100k)

    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • Earn up to 5.40% pa by depositing $1,000 in the previous month
    • No account fees
    • Easy access to your money

    Saver Account (<$250k)

    • Earn up to 5.40% pa by depositing $1,000 in the previous month
    • No account fees
    • Easy access to your money
    4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    • No withdrawal notice periods or interest rate penalties

    Savings Account (Amounts < $250k)

    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    • No withdrawal notice periods or interest rate penalties
    05001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • Maximum Age - 24

    Goal Saver

    • Maximum Age - 24
    02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    No monthly fees
    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    No monthly fees

    Save Account

    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    0200$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • No fees or penalties for withdrawing money
    • Savings guaranteed up to $250,000
    • Maximise your savings and reach your goals faster with Auto-Savings

    Bonus Saver Account (Amounts < $250k)

    • No fees or penalties for withdrawing money
    • Savings guaranteed up to $250,000
    • Maximise your savings and reach your goals faster with Auto-Savings
    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    For customers aged 14-35 years
    For customers aged 14-35 years

    Future Saver Account ( < $50k)

      010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

      Boost Saver

        Important Information and Comparison Rate Warning

        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 April 17, 2024. View disclaimer.

        In a note to customers, Up said both the conditional bonus rate and the base interest rate are changing: 

        • Bonus interest rate will change from 1.5% p.a. to 1.1% p.a;
        • The base interest rate will change from 0.1% p.a. to 0% p.a; and
        • The bonus limit will increase from $50,000 to $1million

        The conditions to earn this bonus interest rate remains unchanged, as customers will still need to make five linked transactions per month. 

        If customers don't meet the bonus conditions they will now earn $0 in interest. 

        This is a massive change to the interest rate and is essentially worth two 25 basis-point Reserve Bank rate cuts, which haven't occurred since late March 2020

        On a balance of $10,000 this represents more than $50 in interest earned in a full year. 

        Interest "won't make a material difference"

        Commenting that Up had already helped tens of thousands of Australians reach their savings goals, Up co-founder Dom Pym said Up's success comes from its unique user experience, and not its interest rate, which it has previously said wasn't as important

        "In the current very low-rate interest environment, interest alone (bonus or otherwise) is not going to make a material difference to most Australians' savings goals," Mr Pym told Savings.com.au. 

        "Whereas these small positive daily savings habits that Up makes a reality for many Australians can actually make a real difference to achieving their savings goals over time.  Were market leaders in simplifying the bonus conditions for interest rates, to just 5 transactions without any minimum monthly deposits required to qualify for bonus interest.

        "With these new changes we’ve announced to the Up Saver interest rate today, we’re going one step further by eliminating the base/bonus concept altogether.

        "Either you are eligible for interest or not, and we have increased the Savers interest rate cap to $1m, which for most Upsiders means they earn interest on all their savings."

        [Read: Neobanks compared: Interest rates & fees]

        Up not the only bank to cut rates recently 

        It's worth noting that Up isn't the only bank to make changes to savings accounts lately. 

        In recent weeks: 

        Major banks Westpac and Commonwealth Bank also made 15 and 5 basis point cuts to their savings account rates respectively, with these products now offering interest rates well below the 1.00% p.a. barrier. 

        [Read: Westpac to offer 3% savings rate to under-30s]

        However, none of these single changes has been as big as the 50 basis points shaved off by Up. 

        This large cut by Up could be in anticipation of another Reserve Bank rate cut, which could occur either next week or in November. 

        Economists at Westpac and NAB initially forecast an RBA rate cut as soon as October to 0.10% (down by 15 basis points), before Westpac flipped on its own prediction and went on to say the cash rate will instead be cut in November

        Westpac Chief Economist Bill Evans said the RBA is likely to defer its policy changes to November 3 to give the government a chance to "clear the air" to sell its Budget.

        "October 6 happened to be Budget Day so our expectation was that it would be another “Team Australia” initiative with both the fiscal and monetary authorities working together to address the economic crisis," Mr Evans said.

        "Cutting the cash rate a week before the Budget announcement has a much less significant effect on the government’s capacity to sell the Budget than acting on Budget Day."

        The market expects the cash rate to be changed in October.

        According to the ASX RBA rate indicator, the ASX 30 Day Interbank Cash Rate Futures indicated a 67% expectation of an interest rate decrease to 0.00% in October as at 30 September. 

        It was as high as 77% on 24 September. 

        AMP Capital chief economist Shane Oliver meanwhile told The New Daily the chance of a 15 basis point rate cut in October is "50-50".