Photo by Lucreative on Unsplash
AMP has rolled back the interest rate on its once market-leading introductory savings account, barely a week after increasing it by more than 50 basis points.
On 27 March AMP announced a new interest rate on its AMP Saver Account, increasing the rate by 54 basis points from 2.11% p.a. to 2.65% p.a.
This interest rate was comprised of:
- An introductory interest rate of 1.60% p.a.
- A base interest rate of 1.05% p.a.
- An introductory term of six months
The maximum interest rate of 2.65% p.a. was one of the highest savings account interest rates available - only Macquarie Bank held a similar interest rate with its 4-month introductory rate of 2.65% p.a.
However, less than two weeks later, AMP reversed most of this interest rate increase, cutting the new interest rate by 39 basis points to a maximum rate of 2.26% p.a.
Key info:
- The base rate is 1.05% p.a.
- The introductory rate is 1.21% p.a.
- These rates apply for deposits between $5,000 to $500,000
- The introductory term is still six months
UPDATE: An AMP spokesperson told Savings.com.au that "clients who signed up during the bonus period will continue to receive the bonus 1.60% above the standard variable rate (currently 1.05%) for six months", meaning their interest rate will remain at 2.65% p.a.
All new customers however will get 2.26% p.a.
The table displays how this account now compares to other introductory savings accounts on the market with high interest rates.
interest
rate p.a.
interest
rate p.a.
term
interest
rate p.a.
*Data accurate as at 18 May 2020. Rates based on a savings balance of $10,000. Sorted by total interest rate. Refer to providers' websites for bonus rate conditions. Note that the base rate will apply once the introductory term has passed.
The 2.26% p.a. interest rate is still higher than nearly every other non-introductory savings account on the market - only Xinja, which recently stopped taking new customers in order to preserve its interest rate - comes close at a 2.25% p.a maximum rate at the time of writing.
But the caveat with products like the AMP Saver is that the rates are introductory - such accounts only have a temporarily-high interest rate, which reverts to the base rate specified once the introductory term is over.
In this case, the rate on AMP's account would revert to just 1.05% p.a. after 6 months, well below the annual rate of inflation (1.80%) and the rates of other savings account products.
The table below features savings accounts with some of the highest non-introductory interest rates on the market.
rate p.a.
rate p.a.
rate p.a.
*Data accurate as at 22 May 2020. Rates based on a savings balance of $10,000. Introductory bonus interest rate products not included. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions.
Non-introductory savings accounts tend to have lower total interest rates than introductory ones, but could allow you to earn more interest long-term.
Read: The different types of savings accounts explained
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