Get App
Most savers still in the dark, with Westpac the only big bank to announce
Australia’s second biggest bank, Westpac, will cut select savings rates by up 0.25 percentage points, effective 30 May.
21 May 2025
Australia’s second biggest bank, Westpac, will cut select savings rates by up 0.25 percentage points, effective 30 May.
Westpac’s Life account will see its headline rate drop by 0.25 percentage points to a maximum ongoing rate of 4.50%, according to the bank’s announcement yesterday.
The 5-month introductory rate on Westpac’s eSaver will drop by 0.25 percentage points to 4.50%, but existing Westpac eSaver customers will be spared from the cut. However, with an ongoing rate of just 1%, these savers have little to crow about.
In better news, young adults aged 18 to 29 with a Life account who qualify for the Spend&Save bonus will retain their maximum ongoing rate of 5% if they meet the bank’s terms and conditions.
Westpac will change these select savings rates on 30 May, while the bank’s variable home loan rates will be lowered on 3 June.
← Mobile/tablet users, scroll sideways to view full table →
| Westpac savings rates – effective 30 May | ||||
|---|---|---|---|---|
| Old max rate | New max rate | Net change | Date effective | |
| eSaver | 4.75% for 5 months then 1.00% | 4.50% for 5 months then 1.00% | -0.25% to max intro rate no change to ongoing rate |
30 May 2025 |
| Life | 4.75% | 4.50% | -0.25% | 30 May 2025 |
| Life (18 to 29 years) | 5.00% | 5.00% | – | 30 May 2025 |
Source: Canstar. Notes: conditions and balance caps apply for maximum rate on select accounts.
CBA, NAB and ANZ are yet to announce what will be happening to their savings rates following yesterday’s cash rate cut.
However, the millions of savers with these banks should not rejoice just yet. The banks are expected to cut at least some savings rates from 30 May.
Highest rates still over 5%, but many now have a target on their backs
Canstar research shows there are currently 12 banks offering at least one ongoing savings rate at 5% or more. This includes accounts for young adults but excludes kids’ accounts.
However, if these 12 banks pass on the full cut in the coming weeks, this list will shrink to just four. With current ongoing savings rates of 5.25% or more, ING, MOVE Bank and BOQ could be three of the sole survivors, with Westpac already confirming it will retain one savings rate at 5%.
Term deposit rates already well below 5% and set to slide further
Tracking shows a flurry of term deposit rates have fallen in the lead up to yesterday’s RBA decision.
In the past month, 50 banks have cut at least one term deposit rate, including ANZ, NAB, and Westpac.
Term deposit rates are now well below 5%, with the highest term deposit rate currently sitting at 4.75%. However, this is unlikely to last long with expectations of two, or potentially even three, more RBA cuts through to the end of the year.
← Mobile/tablet users, scroll sideways to view full table →
| Highest term deposits on Canstar.com.au | ||
|---|---|---|
| Term | Bank | Rate |
| 6 mth | Heartland | 4.75% |
| 1-year | Qudos | 4.50% |
| 2-year | Qudos | 4.30% |
| 3-year | Judo Bank | 4.25% |
| 4-year | Judo Bank | 4.30% |
| 5-year | Judo Bank | 4.35% |
Source: Canstar. Notes: All payment frequencies included.
Households have record savings in the bank
Banks are cutting savings rates at a time when Australians have record savings in the bank.
Latest APRA Monthly Authorised Deposit-taking Institution Statistics, for the month of March, showed the total amount saved in the bank by households hit $1.60 trillion – up $125.8 billion (8.6%) compared to a year earlier. Note: this includes money in offset accounts.
← Mobile/tablet users, scroll sideways to view full table →
| APRA total deposits by households | ||
|---|---|---|
| Amount | Monthly change | Year-on-year change |
| $1.60 trillion | +$8.3 billion +0.5% |
$125.8 billion +8.6% |
Source: APRA Monthly Authorised Deposit-taking Institution Statistics, released 30 April 2025, prepared by Canstar.com.au. Note: deposits from households include term deposits, transaction accounts, mortgage offset accounts and savings accounts on the books of ADIs.
Cash rate cuts are bitter sweet
Canstar’s data insights director, Sally Tindall says, “The May cash rate cut might be a reason to pop the champagne for mortgage customers, however, for savers, it’s likely to go down like a lead balloon.”
“Cash rate cuts are always bitter sweet and if history is anything to go by, most savings rates will be getting a haircut over the next few weeks.
“Savers with a Westpac Life account will see their maximum rate drop to 4.50 per cent from the end of this month, except for those customers lucky enough to be aged 18 to 29. These savers will retain a maximum ongoing rate of 5 per cent, but only if they meet the bank’s terms and conditions each month.
“While this announcement from Westpac will be disappointing news for many of its savings customers, at least the bank has been upfront in letting them know exactly what their savings rates will soon be.
“The other big banks should take a leaf out of Westpac’s book and let their savings customers know the fate of their interest rates.
“In the case of the banks still to announce savings rates – which is currently the vast majority – no news is not necessarily good news. You can expect these rates to fall over the next two to three weeks.
“While there are still savings rates starting with a ‘5’, at this point we’re clinging on to them for dear life. There are currently 12 banks offering at least one savings account with a maximum ongoing rate of 5 per cent or more, however, we expect this will drop to around four banks after the May RBA cut filters through, excluding kids’ accounts.
“Savers need to stay vigilant and monitor rate changes. Loyalty doesn’t pay in this environment. It’s essential to compare rates regularly and be prepared to switch to a better deal.”
PROMOTED
-
For deposit amounts $0 - $250,000
Glossary
PROMOTED
-
For deposit amounts $0 - $5,000,000
Glossary
PROMOTED
-
For deposit amounts $0 - $250,000
Glossary
PROMOTED
See your spending and sort bills with Bill Planner
Award-winning app
-
For deposit amounts $0 - $100,000
PROMOTED
Move money out and keep earning interest.
Four-month variable intro rate.
-
For deposit amounts $0 - $250,000
Glossary
Cover image source: Miljan Zivkovic/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
Try our Savings Accounts comparison tool to instantly compare Canstar expert rated options.
