Self-funded retirees and savers to bear the brunt of big four's interest rate cuts

The big four banks are slashing their savings account rates, but there are still rates of up to 2.65% available from other lenders.
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The big four banks – Westpac, ANZ, National Australia Bank and Commonwealth Bank – have cut the interest rates on a number of their deposit products, in the wake of last week’s reduction of the official cash rate to a new historic low of just 0.50%. The trio, as well as the fourth “big four” Westpac, have passed on the full reduction to home loan rates (banks typically use the cash rate as a guide to set interest rates on both deposit and loan products).

There is speculation that the RBA could cut rates again this week, a rare out-of-cycle decision.

Westpac savings rates:

Westpac has cut a number of its savings accounts, including its eSaver and Life products, from a total variable rate of 1.55% to 1.30%. Its Bump account has fallen from 1.70% to 1.45%. The bank’s “55+ and Retired products have also been reduced:

55+ and Retired Old rate New rate
$0 to less than $10,000 0.10% 0.05%
$10,000 to less than $50,000 0.25% 0.05%
$50,000 to less than $250,000 0.85% 0.60%
$250,000 and over 1.05% 0.80%

Source: Westpac. Current as of 17 March, 2020

ANZ savings rates:

ANZ cut their Pensioner Advantage and Passbook Pensioner Advantage rates by up to 0.25 percentage points, as well as their Investment Account, SMSF Cash Hub, Premium Cash Management Account and ANZ V2 Plus.

ANZ also made cuts of 0.35 percentage points to bonus and introductory rates. Its new savings account rates are as follows:

  • Progress Saver 1.25% – base rate 0.01% and bonus rate 1.24%
  • Online Saver 1.20% – base rate 0.05% and introductory rate 1.15%

NAB savings rates:

Also on Friday, NAB’s new savings account interest rates were reduced by 0.25 percentage points overall, after cuts of 0.06 percentage points to its base rates and 0.19 percentage points to its bonus and introductory rates. The total rates are now as follows:

  • Reward Saver 1.25% – base rate 0.05% and bonus rate 1.20%
  • iSaver Account 1.30% – base rate 0.05% and introductory rate 1.25%

Commonwealth Bank savings rates:

On 11 March, CommBank cut its NetBank Saver accounts by up to 0.35 percentage points. The bank cut its standard rate by 0.05 percentage points, to 0.05%. CBA’s Headline rate is now 1.30%, a reduction of 0.35 percentage points.

Savings cuts are ‘more bad news’ for some retirees

Canstar finance expert Steve Mickenbecker said the big banks had done as expected and passed interest rate cuts through to savers.

“Savings rate cuts have brought 18 months of bad news for self-funded retirees, especially now as the share market tanks with the spread of the coronavirus,” Mr Mickenbecker said.

“The savings account cuts come at the same time banks make cuts to home loan rates, having passed on the full 0.25 percentage point Reserve Bank cash rate cut to home loan borrowers,” he added.

Mr Mickenbecker said he expected term deposit rates would shoulder the load if the RBA cuts the cash rate again.

But he said it’s worth looking at your options because there are still savings rates available above 2% at providers such as Macquarie Bank and Heritage Bank.

Below we break down where on our database you can find the top online savings interest rates with special introductory offers, which are typically only available for a limited time, as well as the top bonus savings rates where you can earn bonus interest continually for meeting certain conditions.

Top 5 online savings accounts on Canstar’s database

Top 5 Online Savings Accounts
Company Account Base Interest Rate Introductory Rate Introductory Period Total Rate
Macquarie Bank Savings Account 0.35% 2.30% 4 months 2.65%
Heritage Bank Online Saver 1.10% 1.40% 4 months 2.50%
AMP Bank Saver Account 1.40% 0.96% 4 months 2.36%
Rabobank Australia High Interest Savings Account 0.80% 1.45% 4 months 2.25%
Bankwest TeleNet Saver 0.25% 2.00% 4 months 2.25%
Source: – 13/03/2020. Based on all flexible savings accounts available to Australian customers with a deposit amount of $10,000. Flexible savings accounts include those with an introductory bonus rate but excludes those with a conditional bonus interest rate. Products listed in descending order by Total Rate, followed by Base Rate. Total Rate includes base rate plus any applicable promotional bonus. Conditions may apply to promotional rates, contact the relevant company for full terms and conditions.

Top 5 bonus savings accounts on Canstar’s database

Top 5 Bonus Savings Accounts
Company Account Base Interest Rate Conditional Bonus Rate Total Rate
MOVE Bank Bonus Saver 0.80% 1.20% 2.00%
RAMS Saver Account 1.15% 0.85% 2.00%
Australian Unity Active Saver 0.50% 1.50% 2.00%
MyState Bank Bonus Saver 0.30% 1.70% 2.00%
BOQ Fast Track Saver 0.20% 1.80% 2.00%
Source: – 13/03/2020. Based on all bonus savings accounts available to Australian customers with a deposit amount of $10,000. Bonus savings accounts include those where a bonus interest rate is earned when specified conditions are met. Total Rate includes base rate plus any applicable conditional bonus. Promotional bonus interest rates may apply. Contact the relevant company for full bonus and/or promotional interest terms and conditions.  Products listed in descending order by Total Rate, followed by Base Rate.

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