ANZ cuts savings account interest rates to lowest yet

author-avatar By on January 23,2020
ANZ cuts savings account interest rates to lowest yet

Photo by Debora Cardenas on Unsplash

ANZ has today swung the axe across a number of its savings account, term deposit and home loan products.

Ahead of the Reserve Bank's cash rate decision next month, ANZ has preemptively cut the interest rate on its popular Online Saver account. 

The base rate has been lowered from 0.10% p.a. to just 0.05% p.a. - the worst of the big four - taking the total rate on the account (including the 3-month introductory bonus rate of 1.5% p.a.) down to 1.55% p.a.

This means that after three months of holding the account, ANZ savers would only earn 0.05% p.a. which is the worst ongoing savings account rate of any of the big four. 

An ANZ spokesperson told their rates remain "competitive".

“We regularly review our rates and look to balance the needs of our customers whenever we make any changes, while remaining competitive.”

Compare that with some of the interest rates being offered by neobanks like Xinja, who currently offer the highest non-introductory savings account interest rate on the market at 2.25% p.a. for their newly launched 'Stash' product.

Xinja has already attracted more than $30 million flowing into its Stash savings account, despite only launching one week ago. 

Xinja Bank founder and CEO Eric Wilson described it as a "ripper response" and said the feedback from customers showed how much support there is for a new way of banking.

"We're committed to the long game of staying lean and reducing costs and overheads to do the best by our customers," Mr Wilson said.

"Having happy customers will go a long way to helping us break the high-cost, high profit model of Australian banking."

The table below displays a snapshot of some of the highest non-introductory interest rates on the market. 

Total interest
rate p.a.
Base interest
rate p.a.
Bonus interest
rate p.a.
2.25% 2.25% 0.00% More details
2.25% 0.40% 1.85% More details
2.25% 0.50% 1.75% More details
2.15% 0.35% 1.80% More details
2.10% 1.04% 1.06% More details

*Data accurate as at 7 February 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.

The move from ANZ follows in the footsteps of NAB, who just last week cut their savings account interest rates on its popular iSaver and Reward Saver accounts. 

The out of cycle savings account rate cuts could suggest the banks are getting ready for a potential cash rate cut by the RBA when they meet for the first time this year in February.

Currently, the markets are tipping the chance of an interest rate cut at almost 60%, with many economists believing the cash rate could fall as low as 0.25% by the year's end. 

The chances of a cash rate cut next month hinge on the unemployment figures, to be released later today.

ANZ has also today cut home loan rates on its Simplicity Plus (loan-to-value ratio of at least 80%) product from 3.24% p.a. to 3.12% p.a.

The bank also reduced its Simplicity Plus home loan for borrowers with an LVR of over 80% from 3.58% p.a. to 3.38% p.a. 

Many of ANZ's term deposit rates have also today been slashed by up to 10 basis points. Its best term deposit rate is currently 1.15% p.a. for a standard five-year term deposit. 

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Emma joined as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).


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