11th hour: Virgin Money winds back savings account interest rate cut following RBA decision

The maximum interest rate offered on the bank’s Boost Saver account will remain at 5.05% per annum (p.a.).

Virgin Money announced its plan to decrease the maximum rate available to holders of the account by 15 basis points to 4.90% p.a. last month.

That would have seen it lower than savings account rates offered by each of the big four banks and in line with the app-exclusive ANZ Plus Save account's 4.90% p.a. unconditional interest rate.

Virgin Money's about-face hasn't appeared to have had an impact on its stablemates Bank of Queensland (BOQ) and ME Bank. 

Both banks cut savings account interest rates from market-leading levels late last month.

BOQ cut the maximum interest rate on its Future Saver Account by 10 basis points to 5.40% p.a. on deposits of up to $50,000.

Meanwhile, ME Bank slashed its HomeME savings account interest rate by 10 basis points to 5.55% p.a., which still sees it positioned as a market leader. 

Both rates are conditional on depositors meeting certain requirements each month, lest they receive a far smaller base interest rate.

The cuts were made just days before the RBA hiked the cash rate 25 basis points to 4.35% at its November meeting.

"We regularly review the rates on our savings accounts," a BOQ Group spokesperson told Savings.com.au.

"We balance the needs of our customers, changing market conditions and the sustainability of our business.

"Both ME Banks HomeME and BOQ’s Future Saver accounts remain highly competitive."

BOQ acquired Virgin Money for around $40 million in 2013 and snapped up ME Bank for $1.3 billion in 2021.

“Virgin Money is always reviewing rates to balance your needs with the fast-changing market conditions,” the bank told customers in an email on Monday.

“We let you know earlier this month that we would be reducing the interest rate on our Virgin Money Boost Saver on Monday 27 November 2023. 

“However, given the recent decision by the RBA to increase the cash rate, we’ve decided not to proceed with the decrease and rates will remain unchanged.”

The Boost Saver’s maximum rate is made up of a 0.05% p.a. base rate and a 5.00% bonus rate, available to those storing less than $250,000 with the bank who deposit at least $1,000 into a Virgin Money Go Account bank and make five transactions each month.

Customers can also still use the bank’s Lock Saver Feature to attain a maximum interest rate of 5.35% p.a. 

After activating the feature, customers must provide 32 days’ notice before withdrawing their savings, similar to if they had locked their funds away in a term deposit. 

The highest interest rate currently offered by a savings account is 5.75% p.a. – the introductory rate provided by Rabobank’s High Interest Savings Account.

Savers can realise that rate on balances of under $250,000 for the first four months, after which it will revert to 4.40% p.a. 

Other leading savings account interest rates include ING Savings Maximiser’s 5.50% p.a. 

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