Retirees, savers dealt another blow as NAB slashes interest rates

author-avatar By on April 23, 2020
Retirees, savers dealt another blow as NAB slashes interest rates

Source: Wikimedia Commons

National Australia Bank cut its 'Reward Saver' and Retirement Account interest rates by 25 basis points on Tuesday.

This comes after the bank made a 25 basis point cut to its 'iSaver' account last week.

Through the 'Reward Saver', the base interest rate is just 0.05% p.a, while the bonus interest rate is now 0.95% p.a.

The bonus applies to account balances up to $50,000.

To get the bonus, customers must make at least one deposit and no withdrawals each month.

For the bank with the slogan 'more than money', NAB's Retirement Account has also seen a 25 basis point cut to its interest rate that applies to balances above $50,000.

That interest rate is just 0.36% p.a for balances between $50,000 and $249,999. 

Interest is calculated daily and paid quarterly on this account, as opposed to the more common monthly interest payment.

Market-wide, the cuts bring NAB in-line with other big four savings accounts:

  • ANZ Progress Saver: 1.00% p.a (0.99% p.a bonus, 0.01% p.a base rate)
  • CommBank Goal Saver: 0.50% p.a (0.40% p.a bonus, 0.10% p.a base rate)
  • Westpac Life: 1.30% p.a (0.90% p.a bonus and 0.40% p.a base)

Interestingly, with headline inflation at 1.80%, savers are effectively losing money over the course of a year if they receive a 1.00% interest rate.

Comparing the big four banks' interest rates on their savings accounts, they lag behind other market-leading competitors in the space, as seen in the table below.

Provider
Total interest
rate p.a.
Base interest
rate p.a.
Bonus interest
rate p.a.
 
Fast Track Saver
1.65% 0.20% 1.45% Go to site
1.75% 0.25% 1.50% More details
1.75% 0.15% 1.60% More details
1.70% 0.25% 1.45% More details

*Data accurate as at 01 August 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.

There are also a bevy of introductory rate savings accounts out there, with higher interest rates for four to six months, however the rates after that period usually revert to something much lower.

Provider
Total
interest
rate p.a.
Intro
interest
rate p.a.
Intro
term
Base
interest
rate p.a.
 
Online Saver
1.55% 1.20% 4 months 0.35% Go to site
1.75% 1.75% 4 months 0.00% More details
2.20% 1.40% 4 months 0.80% More details
2.00% 1.45% 4 months 0.55% More details
2.00% 0.65% 4 months 1.35% More details

*Data accurate as at 07 August 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.


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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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