Commonwealth Bank reduced the interest rate on its bonus and youth savings accounts by 0.05 percentage points on Friday, 5 February, marking the second cut to these accounts in a fortnight.
The popular everyday saving account, NetBank Saver, escaped that round of cuts but was lowered just a few days later on Tuesday, 9 February to 0.45%. It’s interest rate has been cut 11 times by a total of 1.20 percentage points over the past year.
ANZ brought in changes to its savings accounts on Friday, cutting its bonus and introductory interest rates by 0.10 percentage points, meaning every big four bank has now cut savings rates at least once so far in 2021.
CBA savings rate changes:
- NetBank Saver introductory rate cut by 0.05 percentage points, taking the total rate down to 0.45% (a 0.05% base rate plus a 0.40% introductory rate for the first five months).
- GoalSaver bonus rate cut by 0.05 percentage points, taking the total rate down to 0.40% (a 0.05% base rate plus a 0.35% conditional bonus rate).
- Youthsaver bonus rate cut by 0.05 percentage points, to a total rate of 0.65% for under-18s on balances up to $50,000 (made up of a 0.05% base rate and a 0.60% bonus rate on the first $50,000 in the account).
ANZ savings rate changes:
- Progress Saver bonus rate cut by 0.10 percentage points, taking the total down to 0.40% (a 0.01% base rate plus a 0.39% conditional bonus rate).
- Online Saver introductory rate cut by 0.10 percentage points, taking the total rate available for the first three months down to 0.35% (a 0.05% base rate plus a 0.30% introductory rate).
The changes will impact many Australians, given CommBank is the country’s largest bank with around $302.5 billion held in household deposit accounts, and ANZ is the fourth-largest, holding some $140.6 billion in household deposits, according to the Australian Prudential Regulation Authority’s (APRA) latest data.
Other major banks National Australia Bank and Westpac have also reduced savings account interest rates in the past few weeks, leaving most savings accounts with the big four earning around 0.40% in total interest.
Canstar finance expert Steve Mickenbecker said savings rate cuts continue to be “drip fed” to customers with changes almost too small to notice, despite no movements to the official cash rate since November.
“The big banks have cut savings rates by around 1.11 percentage points on average since January 2020, leaving the 0.65% of Reserve Bank cash rate cuts in their wake,” Mr Mickenbecker said.
“The low interest rate environment has dealt a major blow to savers, with the average annual interest earnings on bonus savings accounts now around $400 less annually than what it was 10 years ago. For some people, this could be the cost of their car insurance renewal each year.”
He said as some savings rates creep ever closer to zero, savers could improve their savings habits by chasing the higher rates that are available, building a mix of higher-risk but potentially more lucrative investments such as ETFs into their portfolio, or both.
Where to find the top savings account interest rates
Below we’ve wrapped up where to find the top savings interest rates on our database at the moment, with rates as high as 1.75% available at the time of writing. The second table shows some accounts that are specifically for young adults, who may be able to secure special savings rates of up to 3%.
Top 5 savings account rates on Canstar’s database
|Provider||Account||Base Rate||Bonus Rate||Promo Rate||Promo Period||Total Rate|
|Rabobank Australia||High Interest Savings Account||0.30%||–||1.45%||4 months||1.75%|
|Macquarie Bank||Savings Account||1.20%||–||0.15%||4 months||1.35%|
|Heritage Bank||Online Saver||0.65%||–||0.65%||4 months||1.30%|
|Bank of China||Online Saver||0.40%||–||0.90%||4 months||1.30%|
Source: www.canstar.com.au – 09/02/2021. Based on savings accounts on Canstar’s database, excluding age-limited products, with rates based on a deposit of $10,000. Table sorted in descending order by total rate, followed by base rate. Total rate includes the base rate plus any conditional bonus or introductory promotional rate. Conditions may apply to bonus and promo rates, refer to the provider for more details. ^The ING Savings Maximiser account’s bonus interest conditions will change from 1 March, 2021.
Top 5 savings account rates for young adults on Canstar’s database
|BOQ||Fast Track Starter (14-24-year-olds)||0.05%||2.95%||–||3.00%|
|Rabobank Australia||High Interest Savings Account (no age cap)||0.30%||–||1.45%||4 months||1.75%|
|Newcastle Permanent||Smart Saver Account (Under-25s)||–||1.55%||–||1.55%|
|Greater Bank||Life Saver (Under-25s)||–||1.40%||–||1.40%|
Source: www.canstar.com.au – 04/02/2021. Based on savings accounts on Canstar’s database, with rates based on a deposit of $10,000. Table sorted in descending order by total rate, followed by base rate, followed by bonus rate. Total rate includes the base rate plus any conditional bonus or introductory promotional rate. Conditions may apply to bonus and promo rates, refer to the provider for more details. *Applies to the first $30,000 in your Westpac Life savings account. After this amount, you’ll earn 0.40% p.a. variable interest.
This story has been updated. Originally published on Friday, 5 February 2021.