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Interest rates on savings accounts are on the chopping block as the banks prepare for a potential Melbourne Cup RBA rate cut.
October has been a big month for rate cuts, with all of the big four banks and many smaller banks making pre-emptive savings account rate cuts as a November RBA rate cut looks increasingly likely.
NAB is the most recent big four bank to announce it will be cutting interest rates on its savings accounts.
From today, NAB will reduce its total savings account interest rate by 10 basis points on its Reward Saver and iSaver accounts.
The new rates, effective 30 October 2020 are:
- NAB Reward Saver - 0.70% p.a (0.05% p.a base rate + 0.65% p.a bonus rate that applies if you meet certain conditions throughout the month)
- iSaver - 0.75% p.a (0.05% p.a base rate + 0.70% p.a introductory rate for the first four months)
The changes mark the second time this month NAB has cut savings account interest rates.
Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory and introductory interest rates on the market.
Boost Saver - Savings Account
Product Features
- Red Hot Intro Rate of up to 1.5% for the first 3 months
- Enjoy up to 1.2% thereafter
- Bundled with the Virgin Money Go transaction account
†New customers only. Offer ends 30.11.21. Monthly Criteria and T&C’s apply
Highest
variable rate
1.50%†
Base
variable rate p.a.
0.10%
Product Features
- Red Hot Intro Rate of up to 1.5% for the first 3 months
- Enjoy up to 1.2% thereafter
- Bundled with the Virgin Money Go transaction account
Commonwealth Bank savings account rate cuts
Commonwealth Bank recently sliced rates by 0.05% on a few of its savings accounts, including its kids savings account linked to the popular Dollarmites program.
Commbank's new savings account interest rates are:
- NetBank Saver - 0.85% p.a (0.05% p.a base rate + 0.80% p.a intro rate for the first five months)
- GoalSaver - 0.50% p.a (0.10% p.a base rate + 0.40% p.a bonus rate on balances under $50,000 applicable when conditions are met each month)
- GoalSaver - 0.85% p.a (0.10% p.a base rate + 0.75% p.a bonus rate on balances between $50,000 to $1 million applicable when conditions are met each month)
- YouthSaver - 1.00% p.a (0.10% p.a base rate + 0.90% p.a bonus rate applicable when conditions are met each month)
Westpac savings account rate cuts
Westpac has also carved interest rates on a number of its savings accounts this month, after also cutting savings account rates in September.
Westpac's new rates are:
- eSaver - 0.75% p.a (0.05% p.a base rate + 0.70% p.a intro rate for first five months)
- Life - 0.75% p.a (0.40% p.a base rate + 0.35% p.a bonus rate applicable if you meet conditions each month)
- Bump - 1% p.a (0.55% p.a base rate + 0.45% p.a bonus rate)
ANZ savings account rate cuts
Earlier this month, ANZ reduced its savings account interest rates by 0.15% p.a on its Online Saver and Progress Saver accounts.
ANZ's new rates are:
- Online Saver - 0.65% p.a (0.05% p.a base rate + 0.60% p.a intro rate for three months)
- Progress Saver - 0.70% p.a (0.01% p.a base rate + 0.69% p.a bonus rate)
Neobanks, smaller banks bow to low interest rate pressures
It appears customers of neobanks aren't immune to interest rate cuts on savings accounts, despite these banks offering some of the highest interest rates for savers on the market.
Notable rate cuts to interest rates on savings accounts in the last month include:
- Xinja cutting its 'Stash' interest rate to 1.50% p.a from 1.65% p.a;
- Up Bank slashing its Up Saver interest rate by a whopping 50 basis points to 1.10% p.a;
- UBank's USave + USpend account had its total interest rate cut from 1.60% p.a to 1.46% p.a; and
- 86 400 Save account rate was cut by 25 basis points from 1.60% to 1.35%
The recent cuts to savings accounts appear to be a pre-emptive move by the banks ahead of the RBA's meeting on Tuesday 3 November.
Out of 24 Bloomberg-polled analysts, 14 expect the RBA to cut the cash rate by 15 basis points on Melbourne Cup day.
This would take the official cash rate to a new record low of 0.10% - not far away from negative territory.
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