How much less interest are you earning on $10,000 in savings now than a year ago?

New data charting falling savings account interest rates reveals some savers have copped a 39% whack to their yearly earnings. However, the research also shows it is still possible to find accounts offering more than 2% interest.

Interest rates on online savings accounts and term deposits have been slowly falling this year since the Reserve Bank of Australia (RBA) brought the official cash rate down to just 1% in July with a second consecutive rate cut.

Close to 60 lenders on Canstar’s database – including the major banks – have reduced their online savings interest rates, by an average rate of 0.40 percentage points. The average base rate on these accounts is now just 0.92%, according to this data.

Then there’s term deposits, where just over 60 lenders on the database have cut 12-month term deposit rates by an overall average of 0.53 percentage points, bringing the average rate down to 1.79%. Just this week lenders including National Australia Bank, Suncorp and Westpac reduced some of their term deposit rates.

But what does that all mean in real terms for the average Aussie’s savings account? The Canstar Research team crunched the numbers to see how much savings rates have suffered in the past 12 months.

They found someone who put $10,000 into a five-year term deposit in August last year could earn a total of $1,400 in interest at maturity in 2023, compared to the same term deposit taken out today which would earn you only $856 in interest by 2024 – that’s $544, or 39%, less.

They found that if you’d put $10,000 into a flexible online saver account in August 2018, in a month you’d have earned an average of about $8.67 in interest, but if you started now you’d only earn about $6.14 per month. Over the course of a year, that equates to about $104 interest in 2018, versus $74 in 2019. That’s down by 29%.

As for bonus saver accounts – where a bonus interest rate can be earned on top of the base rate for meeting certain conditions – $10,000 could have earned about $14.12 in interest a month on average this time last year, compared to about $10.93 now. That’s about $169 over a year in 2018, compared to $131 in 2019 – a drop of around 23%.

As rates on savings accounts continue to creep closer to zero, these comparisons might seem a bit grim, but it is possible to find rates of around 2% or higher. Below is a breakdown of the top five interest rates currently available for a deposit amount of $10,000 across different kinds of saving products.

What are the top flexible online savings account rates?

Flexible online savings accounts are those where no conditional bonus applies, but there still may be introductory (or promotional) rates available for limited-time offers. The below table excludes promotional offers though, and just lists current ongoing base rates, from Canstar’s database.

What are the top bonus and promotional savings account rates?

The table below displays some of the highest online saver interest rates, including introductory and conditional bonus rates, for savings accounts on Canstar’s database at the time of writing.

What are the top 6-month term deposit rates?

The tables below display some of the highest term deposit rates on Canstar’s database at the time of writing, for a deposit amount of $10,000 and terms of six months, one year and five years respectively, with interest paid at maturity.

What are the top 12-month term deposit rates?

What are the top 5-year term deposit rates?

Follow Canstar on Facebook and Twitter for regular saving account updates.