UBank to cut savings account, term deposit rates

author-avatar By on March 06,2020
UBank to cut savings account, term deposit rates

Photo by Jelleke Vanooteghem on Unsplash

NAB-owned UBank has been quick to cut its interest rates for savers in the wake of Tuesday's cash rate cut from the Reserve Bank.

The online bank announced today it will pass on the full 25 basis point rate cut made by the Reserve Bank (RBA) to its savings account interest rates, which includes the following products:

  • USaver;
  • USaver Reach; and
  • USaver SMSF

On the change, a UBank spokesperson said: "We regularly review our interest rates to make sure we’re always offering highly competitive rates to both our home loans and savings customers,"

"It’s important we strike the right balance between delivering great value to our customers, responding to changing marketing conditions and managing our business sustainably."

That 25 basis point cut is being made to the base variable rate on the products.

The USaver Ultra bonus variable rate remains at 1.06% p.a. for eligible customers who link their account to a USaver Ultra transaction account and meet the bonus criteria.

This means the maximum interest rate UBank savers can earn is now only 1.85% p.a - just 5 basis points above the current rate of inflation (1.80%). 

To qualify for the maximum interest rate, USaver customers need to:

  • Deposit at least $200 per month 
  • Keep their account balance below $200,000 
  • Link the account to a UBank transaction account 

The table below displays a snapshot of savings accounts with some of the highest non-introductory interest rates on the market. UBank's interest rate will fall on 9 March 2020. 

Provider
Total interest
rate p.a.
Base interest
rate p.a.
Bonus interest
rate p.a.
 
1.85% 0.20% 1.65% More details
1.85% 0.15% 1.70% More details
1.85% 0.25% 1.60% More details
1.85% 0.10% 1.75% More details
1.80% 0.10% 1.70% More details

*Data accurate as at 01 June 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.

UBank also announced it would cut its variable home loan interest rates by 25 basis points on 3 April, a whole 31 days after the RBA rate cut.

UBank also drops deposit rates

UBank also announced it would be cutting term deposit rates, but not by the full 25 basis points. 

According to UBank it will be cutting deposit rates by:

  • 15 basis points for its six-month term; and
  • 10 basis points for all other terms and SMSF customers 

As with savings accounts, UBank's term deposit cuts will come into effect on March 9. 

The highest deposit rate it now offers is 1.70% p.a for six months. 

Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.

Provider
Advertised
interest rate
Interest
frequency
 
Term Deposit
1.60% End of term More details
1.80% Monthly,
end of term
More details
1.75% Annually,
end of term
More details
1.70% End of term More details
1.65% End of term More details

*Rates correct as at 01 June 2020. Rates based on a $50,000 deposit for 6 months.

What previous changes has UBank made? 

In 2019's three previous rate cut months: June, July and October, UBank made the following cuts to its savings account interest rates:

WIth the Reserve Bank cutting the cash rate by a total of 100 basis points in the past 10 months, UBank's maximum savings account interest rate for the USaver Ultra savings account has fallen by 102 basis points. 

Before the RBA cut in June 2019, the account had a maximum interest rate of 2.87% p.a. 


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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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