CBA, ANZ, NAB and Westpac: Savings and term deposit rate changes following cash rate hike

ANZ, NAB and Westpac have opted to increase their savings rates, while CommBank has bumped up its term deposit rates.

It comes in response to the Reserve Bank increasing the official cash rate for the first time in over a decade, with the 25 basis point hike taking the cash rate to 0.35%.

ANZ, NAB and Westpac will pass on the cash rate rise in full to some of their savings accounts, while CommBank will lift some of its term deposit rates almost eight times more than the cash rate increase.

Along with the big four, other banks have also made moves to increase their savings account and term deposit rates.

CommBank

CommBank is the only major bank that has not yet committed to passing on the rate rise to its savings account customers at the time of writing. Instead, the bank has reportedly announced it will increase the interest rate on its 18-month term deposits by 1.95 percentage points, taking the total rate to 2.25%. It will be available for customers depositing between $5,000 and $2 million.

ANZ

ANZ will increase the Progress Saver bonus interest rate by 0.25 percentage points, taking the total rate to 0.40%. The change will be effective from 13 May 2022.

Customers are able to get the bonus rate if they deposit at least $10 a month and don’t withdraw any money. Progress Saver is ANZ’s most popular savings product, according to the major bank.

NAB

NAB will increase the Reward Saver bonus rate by 0.25 percentage points, lifting the total rate to 0.50%. The new rates will be effective from 13 May 2022.

Customers can get the bonus rate when they make at least one deposit before the second-last banking day each month and no withdrawals.

Westpac

Westpac will increase the Westpac Life and Westpac 55+ and Retired savings accounts by 0.25 percentage points, taking the total rate you can earn to 0.50%. The rate changes will come into effect from 17 May 2022.

To get the bonus rate on Westpac Life, customers need to make a deposit to the account and grow their balance each month. For the Westpac 55+ and Retired accounts, your rate will depend on your account balance.

Westpac will also increase some of its term deposit rates by 0.10% from 6 May 2022. These changes will apply to terms between 90 days to five years. For a five-year term deposit, the new rate will be 3.80%.

What other banks have increased their savings rates?

There are a number of other providers that have announced rate hikes on savings and term deposit rates. For example:

Citi

Citi will increase its Online Saver introductory rate and ongoing rate by 0.25 percentage points. This will take the total rate to 1.35% for the first four months for balances under $500,000. After four months or for balances exceeding $500,000, the ongoing rate will be 0.60%. The changes will come into effect on 13 May 2022.

Gateway Bank

Gateway Bank has already increased its rates on three-, six-, seven-, eight-, 10-, 11- and 12-month term deposits. Increases range from 0.05 to 0.60 percentage points.

Greater Bank

Greater Bank will increase its term deposit rates for one to five year terms by 0.25 percentage points. The changes will take effect from 10 May 2022.

G&C Mutual

G&C Mutual has also increased its rates on three-, six-, nine-month and one-year term deposits. Increases range from 0.10 to 0.85 percentage points.

Macquarie Bank

Macquarie Bank has announced it will increase its Savings Account welcome rate by 0.15 percentage points, taking the total rate to 1.50%. The welcome rate applies for the first four months. The change will come into effect next week.

ME Bank

ME Bank will increase rates on six-month to five-year term deposits, with increases ranging from 0.25 percentage points to 1 percentage point. The changes will come into effect from 6 May 2022.

Newcastle Permanent

Newcastle Permanent has said it will increase the rates on a number of savings products, including an increase of 0.60 percentage points on selected term deposit offers. This will take effect from 18 May 2022.

RACQ

RACQ has announced it will increase interest rates on savings products by up to 0.20 percentage points.

St.George, Bank of Melbourne, BankSA

St.George. Bank of Melbourne and BankSA have announced they will increase their Incentive Saver bonus rate and Retirement Access Account rate by 0.25 percentage points each. This will take the maximum rate on both the Incentive Saver and the Retirement Access Account to 0.50%. The change will be effective from 17 May 2022.

Suncorp

Suncorp will increase its 12-month term deposit rates by 0.40 percentage points to 1.40%. The change will come into effect from 18 May 2022.

How will this affect your savings?

So what difference will this actually make to your savings? To give a hypothetical example, Westpac previously found that its customers have $22,020 in their transaction, savings and term deposit accounts on average (as of 31 December 2020).

If you are with one of the big four banks, you likely have a savings account with a 0.25% interest rate at the time of writing. If you had $22,020 in your account, you would currently be earning about $55 in compound interest on that amount in a year.

If your savings rate increased to 0.50%, you could earn about $110 a year – which is about double the interest.

But if you want to make a bigger impact, consider switching to a high-interest savings account. At the time of writing, the best interest rate available to savers of all ages is 1.35%. This is offered by AMP Bank and ING as an ongoing rate, and Macquarie Bank and Rabobank as an introductory rate.

If you switched to an account with a 1.35% rate, you could stand to earn about $299 interest in a year on an account with $22,020. So it can definitely pay to shop around.

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