Commonwealth Bank savers take on another round of interest rate cuts

Around this time last month, we announced Commonwealth Bank was reducing its savings account interest rates. Today the rates will track even lower, marking the sixth cut to one of the accounts this year.
Woman at ATM. CBA has cut savings rates 20 October 2020.
Commonwealth Bank cut savings interest rates on 20 October, 2020. Image source: Vitalii Tairov.

Commonwealth Bank savings accounts will drop by 0.05 percentage points today, with cuts applied to introductory and bonus interest rates. The new rates are as follows:

  • 0.85% – NetBank Saver (0.05% base rate + 0.80% introductory rate for the first five months)
  • 0.50% – GoalSaver (0.10% base rate + 0.40% bonus rate on balances below $50,000 when conditions are met each month unchanged)
  • 0.85% – GoalSaver (0.10% base rate + 0.75% bonus rate on balances from $50,000 to over $1 million when conditions are met each month)
  • 1% – Youthsaver (0.10% base rate + 0.90% bonus rate when conditions are met each month)

Today’s cuts from Australia’s largest bank, with some 15.9 million customers, marks the sixth time this year CBA has reduced savings rates on the NetBank Saver, lowering the account by a total of 0.80 percentage points in 2020.

The Goal Saver has been reduced three times this year by a total of 0.40 percentage points.

Just over a month ago, on 18 September, both the NetBank Saver and Youthsaver accounts were cut by 0.05 percentage points.

CBA follows Westpac in making multiple rate cuts to savings accounts recently, while all four major banks have reduced savings rates at least once in the past month.

Customers banking their savings with neobanks have not been immune to cuts, with lenders including Volt, Xinja and 86 400 having taken rates lower last week.

Throughout the year, 63 providers on Canstar’s database have decreased savings account rates and only three have increased.

Canstar’s analysts have seen regular savings accounts on the database fall by an average of 0.56 percentage points in 2020, to the average rate now of just 0.58%, while bonus savings accounts have fallen by an average of 0.57 percentage points, and are now tracking at 0.93% on average.

Canstar finance expert Steve Mickenbecker said rarely does a week pass lately without one of the big banks cutting savings rates, but there are still competitive rates to be found elsewhere.

“The cuts to savings accounts continue to gently roll over savers, with hardly a ripple each time but adding up to a tidal wave,” Mr Mickenbecker said.

“Six cuts this year from CBA have almost halved its NetBank savings rate from 1.65% down to 0.85%.

“Savers can avoid a wipe out of interest earnings with rates up to 2% still available, but they have to get amongst the lesser known brands to get these rates.

“Fortunately the government guarantee also applies to smaller Authorised Deposit-taking Institutions, providing a safety net for your savings.”

  1. 2% – Rabobank Australia’s High Interest Savings Account (0.55% base rate + 1.45% introductory rate for the first four months)
  2. 1.60% – Heritage Bank’s Online Saver (0.80% base rate + 0.80% introductory rate for the first four months)
  3. 1.60% – Bank of China’s Online Saver (0.60% base rate + 1% introductory rate for the first four months)
  4. 1.60% – Up’s Up Savers (0.10% base rate + 1.50% bonus rate)
  5. 1.55% – ME Bank’s Online Savings Account (0.10% base rate + 1.45% bonus rate)

Source: www.canstar.com.au – 20/10/2020. Based on savings account rates for a deposit amount of $10,000. Includes flexible savings accounts that allow flexible access to balance whilst paying an interest rate and bonus savings accounts that pay a bonus rate when conditions are met each month. Top 5 selected and products listed in descending order by total rate, followed by base rate. Total rate includes the base rate plus any applicable conditional bonus rate or promotional rate. Conditions may apply to bonus and promotional rates; contact the relevant company for full terms and conditions.

 

This article was reviewed by our Sub Editor Jacqueline Belesky before it was published as part of our fact-checking process.

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