The base rate on the Life savings account has been cut by 0.15% to 0.10% p.a. with the bonus rate being lifted by the same amount to 4.15% p.a. - up from 4.00% p.a.
See also: The different types of savings account interest rates explained
To achieve the top bonus rate of 4.25% p.a., customers must:
- keep an account balance above $0 at all times
- make a monthly deposit into the account (any interest paid does not count)
- have a higher balance at the end of the month than the beginning
The base rate/bonus rate shift has also been applied to Incentive savings accounts products offered by Westpac group brands St George, BankSA, and Bank of Melbourne.
Incentive products now also offer a 0.10% p.a. base rate (a 0.15% drop from 0.25%) with a 0.15% boost to the bonus rate - now 4.30% p.a. (up from the old rate of 4.15% p.a.).
The changes come as Westpac adjusts its savings account rates on select products across the group (see more on other changes below).
See also: Quick guide to Westpac savings accounts
Another base rate chopped
The big bank continues the ongoing trend of deposit-takers offering negligible - sometimes no - base rate interest coupled with healthier bonus rates which generally come with numerous strings attached.
The ACCC called out the growing practice in its report into the deposit market in December 2023.
It found 71% of all savings accounts with a conditional interest rate failed to receive the bonus rate during its study period.
More deposit takers have gone down the 'low base rate/extra conditions' path in the two years since.
Recent savings account changes
In September, Up's popular online Saver accounts instituted a "dual" interest rate system and a 'no access' requirement on top of existing bonus rate conditions.
The base rate for those not meeting the increased requirements remains at 0.00% p.a.
In October, Ubank's new balance growth requirement kicked in on its Save account which had seen other changes, including new conditions added, in previous months.
Last month, NAB-owned Ubank boosted its four-month welcome bonus rate after NAB's full-year results revealed Ubank's deposits had lost ground in the six months to September.
Ubank's base rate for those not meeting the conditions also remains at 0.00%.
Last month, Westpac also instituted a change to its Life savings account requiring customers aged 18-34 to make 20 or more transactions a month to qualify for the top bonus interest rate.
That was up from the previous requirement of five transactions.
See also: Are you missing out on bonus interest?
The market fights back
But it seems deposit customers may be voting with their cash.
The latest APRA figures show Macquarie Bank's retail and business deposits have grown by 25% over the past 12 months, compared to 8% market growth overall.
This is being largely attributed its 'no conditions' retail saving account product, currently offering an ongoing variable rate of 4.25% p.a. on balances up to $2 million.
See also: Quick guide to Macquarie savings accounts
Market analysts believe many retirees with large savings balances are also being lured to the higher interest, no strings product.
The ongoing savings account rate is higher than Macquarie's top term deposit rate, as well those currently offered by the big banks.
Macquarie has said it pays interest on 97% of its deposit accounts.
By contrast, an analysis of the big four banks' recent full-year results found they have more than $320 billion in non-interest bearing deposits - and that doesn't include accounts with very low interest rates when bonus conditions aren't met.
Other Westpac savings changes
As part of its savings account changes, Westpac has also boosted the bonus rate by 0.05% on its Bump Savings account for children aged under 18.
The new bonus rate is now 2.55% p.a. on top of an unchanged base rate of 1.75% p.a.
To earn bonus interest on a Bump account, customers must:
- keep their account balance above $0 at all times
- make a monthly deposit into the account (any interest paid doesn't count)
- ensure their balance is higher at the end of the month than the beginning
Across the Westpac group, the Maxi Saver account (offered by St George, BankSA, and Bank of Melbourne) has seen its digital bonus rate upped by 0.10%.
It takes the Maxi Saver's digital headline introductory rate to 4.50% p.a. in a limited-time welcome offer, with the rate reverting to the standard variable rate of 1.00% p.a. after six months.
The new top rate is only available to new Maxi Saver customers opening their accounts online.
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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.
| Bank | Savings Account | Base Interest Rate | Max Interest Rate | Total Interest Earned | Introductory Term | Minimum Amount | Maximum Amount | Linked Account Required | Minimum Monthly Deposit | Minimum Opening Deposit | Account Keeping Fee | ATM Access | Joint Application | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
0.05% p.a. Bonus rate of 5.30% Rate varies on savings amount. | 5.35% p.a. | $1,097 | – | $0 | $249,999 | $0 | $0 | $0 | |||||||||||
2.25% p.a. Bonus rate of 3.15% Rate varies on savings amount. | 6.00% p.a. Intro rate for 4 months then 5.40% p.a. | $1,134 | 4 months | $0 | $499,999 | $0 | $0 | $0 | Promoted | Disclosure | |||||||||
4.00% p.a. | 5.90% p.a. Intro rate for 4 months then 4.00% p.a. | $936 | 4 months | $0 | $249,999 | $0 | $1 | $0 | Disclosure |
