Two more major banks have cut savings account interest rates this week: ME Bank and Macquarie Bank.
ME Bank, which passed on the full RBA rate cut to variable home loan customers, announced on Wednesday it would be cutting the maximum rate on its Online Savings Account by 15 basis points, taking the maximum rate from 1.35% p.a to 1.20% p.a.
The conditions to earn the bonus rate (1.15% p.a) are to simply make four tap and go purchases per month from a linked ME transaction account.
Macquarie Bank, which did not cut variable home loan rates in November, made the same cut to its savings account, taking the total rate on its savings account from 1.35% p.a to 1.20% p.a, effective today.
For Macquarie balances over $250,000, this total interest rate falls to just 0.95% p.a, while a temporary 1.35% p.a introductory rate applies for the first four months.
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.
These are just the latest banks to pass on the full RBA rate cut of 15 basis points to savings accounts.
Earlier this week, we reported that NAB-owned UBank, which promises to pass on the full cash rate cut to variable home loans later this month, announced it would be lowering its USave interest rate by 15 basis points in total.
ING, however, did not pass on the 15 basis point cut to variable home loans, yet still slashed savings account rates by that very same margin.
This has resulted in the highest ongoing savings account rate on the market being no higher than 1.50% p.a right now - special accounts excluded.
Some accounts like the BOQ Fast Track Starter Account for 14-24 year olds or the Westpac Life account for savers aged 18 to 29 are offering special interest rates up to 3.00% p.a, but these are few and far between, and aren't available for everyone.
With research from micro-investing app Raiz this week showing as many as 85% of Australians don't even know what the interest rate on their bank account is, savers should remain vigilant in case their bank chooses to chop rates even further.
"To put it simply, inflation may be low, but interest rates are in many cases even lower," Raiz Founder and CEO George Lucas said.
“This has led commentators to label savings accounts as ‘parking accounts’, where savers may be going backwards as they’re not being compensated for the decrease in purchasing power of their savings, due to inflation.”
Term deposit rates haven't had any more luck in recent months, and the downward trend has continued post-RBA rate cut.
Already in November, a plethora of banks have cut term deposit rates by at least 15 basis points:
- Commonwealth Bank: Cut by up to 15 basis points
- Suncorp Bank: Cut by up to 0.15%
- St. George, BankVIC and BankSA: Cut by up to 40 basis points
- IMB: Cut by up to 15 basis points
- ING: Cut by up to 23 basis points
The average term deposit rate across all terms has now fallen below 0.70% p.a, a far cry from where rates used to be as recently as early 2019.
Savings.com.au's analysis of big four bank data last week found roughly half of deposits (including term deposits) with the big banks are earning below 0.25% p.a in interest.
Over one fifth (22%) of NAB's deposits earn less than 0.01% p.a.
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