A new market-leading savings rate for all adults is set to launch from next week, with Judo Bank announcing it will increase its savings rates by 0.25 following Tuesday's cash rate hike.
The maximum rate on the bank's relatively new savings account will rise to 5.35% on 23 March for both new and existing customers who meet the monthly terms and conditions, on balances up to $250,000.
The news comes as other market leaders such as AMP Bank also confirmed they will be passing on Tuesday’s 0.25 cash rate hike to their savings customers.
Market leading rates from those that have announced savings hikes | ||||
|---|---|---|---|---|
Ongoing rate | Lender | Effective | Conditions for max rate | |
Bonus saver account - all adults | 5.35% | Judo Bank | 23 March | Deposit $300 / mth. On balances up to $250k. Base rate of 0.05%. |
Bonus saver - young adults | 5.50% | Westpac | 27 March | 20+ purchases on linked bank acct, grow savings bal, up to $30k. Ages 18-34. Base rate of 0.10%. |
'No strings' account | 4.85% | AMP Bank | 23 March | On balances up to $500,000. |
Source: Canstar. Note: criteria applies to qualify for max rate, if not the base rate will apply. Note market leaders are estimates. Does not include banks that have not yet announced savings rate changes on their websites.
How did savers fare during the February cash rate hike?
While the majority of banks are yet to announce their new savings rates, Canstar analysis shows since the last rate hike on 3 February, many were selective on which rates saw a boost and which missed out.
On average, the total rate on bonus saver accounts increased by 0.25, while the base rate – the rate earned if savers don’t meet their bonus conditions – rose by an average of just 0.01.
Average bonus saver rates since February RBA hike | |||
|---|---|---|---|
1 Feb | Today | Change %-pts | |
Maximum rate | 5.35% | 4.23% | +0.25 |
Base (if conditions are met) | 5.50% | 0.22% | +0.01 |
RBA cash rate | 3.85% | 4.10% | +0.25 |
Source: Canstar. Savings account interest rates based on a deposit balance of $10,000. Bonus accounts: Includes accounts that pay a bonus rate when conditions are met each month. Total rate includes the base rate plus the conditional bonus rate.
Canstar’s data insights director, Sally Tindall, says, “It is encouraging to see market leaders such as Judo Bank, AMP Bank and Westpac, for young adults, support savers by passing on this week’s rate hike.”
“However, if you’re one of millions of Australians with a bonus saver, make sure you’re clearing the monthly terms and conditions because what we find, time and time again, is that the banks typically pass on the hikes to savings bonus rates, but that people who trip up on the fine print miss out.
“For savers who prefer simplicity, Macquarie is positioned to lead the market; its ongoing rate is set to rise to 4.75 per cent, offering the highest return available without monthly hurdles.
“Importantly, with the majority of banks still yet to announce their savings changes following the March cash rate hike, these early moves by the market leaders will put pressure on the others to pass the rate rise on to their savings customers. While the highest ongoing savings rate for all adults is set to hit at least 5.35 per cent in coming days, it could inch even higher with this competitive pressure.”
