Image source: missbossy (Flickr)
As the ongoing interest rate on ANZ’s online saver account approaches zero, one of Australia’s highest-rate accounts will also have its interest rate cut tomorrow in spite of the Reserve Bank’s decision to hold the cash rate steady this month.
ANZ today cut the base rate on its Online Saver savings account by 5-basis points from 0.15% p.a. to 0.10% p.a, while still offering its 3-month introductory rate of 1.75% p.a. on top of this.
Meanwhile, Westpac-owned bank RAMS confirmed today that the maximum interest rate on its highly-regarded RAMS Saver account will be reduced by 10 basis points from 2.35% p.a. to 2.25% p.a. on 25 September (tomorrow).
Like the previous cuts, this month’s rate reduction only applies to the bonus rate, which will be lowered from 1.20% p.a. to 1.10% p.a, while the base rate will remain at 1.15% p.a.
To earn the bonus rate, customers must still satisfy the following conditions:
- deposit at least $200 per month
- make no withdrawals in the month
- have an account balance between $200 to $500,000
Tomorrow’s rate cut will see RAMS fall further behind a number of other high-interest bonus savings accounts on the market, such as those offered by new entrants 86 400 and Up Bank:
|Provider||Total interest rate p.a.||Base interest rate p.a.||Bonus interest rate p.a.|
|Save Account||2.25%||0.40%||1.85%||More details|
|Fast Track Saver||2.15%||0.35%||1.80%||More details|
|Usaver with Ultra||2.10%||1.04%||1.06%||More details|
|Online Savings Account||2.05%||0.35%||1.70%||More details|
|Total interest rate p.a.||Base interest rate p.a.||Bonus interest rate p.a.|
|Fast Track Saver|
|Usaver with Ultra|
|Online Savings Account|
*Data accurate as at 20 November 2019. Rates based on a savings balance of $10,000. Introductory bonus interest rate products not included. Sorted by total interest rate, then by provider name (A-Z).
In addition to having a lower maximum rate than these products, the RAMS Saver Account is the only one with a ‘no withdrawals’ condition.
The bonus rate conditions of these other products include:
- 86 400 Save Account: Deposit $1,000+ each month, balance under $100,000
- BOQ Fast Track Saver: Deposit $1,000+ each month to linked ‘Day2Day Plus’ transaction account, balance under $250,000
- MyStateBank Bonus Saver: Deposit $20+ each month, make 5+ VISA debit card transactions each month from linked account, balance under $150,000
- Up Saver: Make 5+ debit card or digital wallet purchases from your Up Everyday Account, balance under $50,000
- UBank USaver with Ultra: Deposit $200+ each month into USaver Ultra or linked USaver account from a non-Ubank account, hold a USaver Ultra transaction account, balance under $200,000
However, it should be noted that the RAMS Saver account does boast one of the highest ongoing maximum interest rates for savers with balances between $250,000 to $500,000 given that the bonus rates on the above accounts have maximum balance limits of $50,000-$250,000.
More cuts to come?
The rate cut announcements follow a similar move last week by ING Australia to cut the bonus rate on its popular Savings Maximiser account by 10 basis points.
With the Reserve Bank of Australia (RBA) widely expected to cut the cash rate to 0.75% next month, this month’s out-of-cycle savings account rate cuts could be seen as bellwethers.
However with savings account and term deposit interest rates fast approaching zero, banks are running out of capacity to pass on future cash rate cuts to home loan customers by lowering deposit rates, particularly customer-owned banks.
Time will tell how far banks will be willing to lower deposit rates before they start denying cuts to home loan customers.
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