ANZ and National Australia Bank, along with digital bank 86 400, have reduced some of their savings account interest rates, effective as of 14 April.
ANZ was the first of the big four banks to move savings rates following the Reserve Bank of Australia’s latest monetary policy update on 7 April, lowering the rates on its Online Saver and Progress Saver accounts. NAB followed with changes to its iSaver account.
Both major banks’ cuts shaved 0.25 percentage points off the total interest rates they had available, and followed hot on the heels of reductions they made to the same accounts just last month. On 13 March, interest rates on ANZ’s accounts were cut by 0.35 percentage points and NAB’s by 0.25 percentage points.
To put that into perspective, Canstar finance expert Steve Mickenbecker said the total ANZ cuts of 0.60 percentage points over the past month worked out to around $10 in lost interest for a saver with $20,000 in the bank – about the cost of a monthly Netflix subscription.
The big four banks’ online savings account interest rates – where introductory interest offers are available during varying introductory periods – are now as follows:
- ANZ Online Saver: 0.95% (0.90% introductory rate and 0.05% base rate)
- CBA Netbank Saver: 1.05% (1% introductory rate and 0.05% base rate)
- NAB iSaver: 1.05% (1% introductory rate and 0.05% base rate)
- Westpac eSaver: 1.30% (1.25% introductory rate and 0.05% base rate)
Additionally, these are the big four banks’ current bonus account savings rates, where ongoing bonus interest is available if customers meet certain deposit or withdrawal requirements each month:
- ANZ Progress Saver: 1% (0.99% bonus rate and 0.01% base rate)
- CBA Goal Saver: 0.50% (0.40% bonus rate and 0.10% base rate)
- NAB Reward Saver: 1.25% (1.20% bonus rate and 0.05% base rate)
- Westpac Life: 1.30% (0.90% bonus rate and 0.40% base rate)
To compare that to the rest of the market, Canstar’s database shows savers could earn up to 2.65% interest in an online savings account from a non-major bank if they are willing to chase introductory offers, while bonus savings accounts have interest rates available as high as 2%.
These changes saw ANZ’s Online Saver account introductory interest rate offer – which is available for the first three months a customer holds the account – lowered by 0.25 percentage points to the new rate of 0.90%. Combined with the base interest rate of 0.05%, the total rate available on this account is now 0.95% during the introductory period, after which point it would revert back to the base rate.
As for the ANZ Progress Saver, its bonus interest rate – which is available to customers who deposit at least $10 each month and have no withdrawals, fees or charges during the month – was reduced by 0.25 percentage points to 0.99%. If customers meet those bonus conditions, this means that combined with the ongoing rate of 0.01%, customers could now earn a maximum of 1% interest with this account if they meet those criteria.
NAB’s changes applied only to its iSaver account’s introductory interest rate, which is available for the first four months. This was cut by 0.25 percentage points to 1%. Combined with the existing base rate of 0.05%, this account could now earn a total of 1.05% for that initial period.
As for other lenders, neobank 86 400 announced to customers it would reduce the base rate on its Save account by 0.15 percentage points, taking it down to 0.25%, effective 14 April. If customers continue to deposit at least $1,000 per month into an 86 400 account, they can still earn the bonus interest rate of 1.60%. This means the Save account can now earn a maximum of 1.85%.
ING waives eligibility criteria for bonus interest
Customers with an ING’s Savings Maximiser account will no longer need to meet the usual conditions in April, May or June this year to be able to earn the full bonus interest rate available, as long as they had met the conditions on that account in any of the first three months of 2020.
ING announced this news on 7 April, with ING Head of Retail Banking Melanie Evans saying the bank realised it was a tough time for many Australians who may not be transacting as often or saving as much.
Typically, to earn the full rate of 1.80% on the Savings Maximiser account (1.70% in bonus interest plus the 0.10% base rate) customers would have to deposit at least $1,000 into their Orange Everyday bank account or another ING account, and make a minimum of five transactions from the attached card each month.
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