‘Disappointing for customers’: Banks announce savings rate cuts

Australia’s major banks and financial institutions have cut saving rates in the days following the Reserve Bank moving on interest rates.

In unwelcome news for savers, seven financial institutions have this week announced they are reducing savings rates.

NAB has moved on two of its savings accounts, reducing the rates on its Reward Saver and iSaver products.

Reward Savers will get a new maximum rate of 4.10 per cent, while iSavers will get up to 4.40 per cent for the first four months before the account reverts back to 1.25 per cent.

NAB has moved on its savings accounts 10 days ahead of variable mortgage rates.

BOQ’s Future Saver account, which is available to young adults aged 14-35, has dropped from 5.00 to 4.85 per cent.

Macquarie Bank has cut both savings and mortgage rates.

Macquarie savers will now get a maximum 4.25 per cent, while those on a transaction account will get 2 per cent going forward.

Other banks that have already cut savings rates this week include AMP, Great Southern Bank, ME Bank and Hume Bank.

The move on savings accounts follows the Reserve Bank of Australia on Tuesday announcing it had lowered the official cash rate by 25 basis points to 3.60 per cent.

Canstar data insights director Sally Tindall says the third RBA rate cut of the year is already hitting savers in the hip pocket.

“We expect more savings rates will fall victim to this latest RBA cut in the weeks ahead; however, banks aren’t likely to make a song and dance about them,” she said.

Following the RBA’s announcement, Commonwealth Bank was the first of the major banks to tell customers it would pass on the rate cut in full to variable rate home loan customers, effective from August 22.

Shortly after, Westpac said it was passing on the cut in full to their variable rate customers and savers alike.

Westpac savers’ interest rates will drop from August 22, reducing the amount they are making off their money, but mortgage holders will have to wait a further four days to get any interest-rate relief.

ANZ announced similar terms for borrowers, also decreasing variable rates by 25 basis points effective August 22.

CBA and ANZ savings rates are still under review, but Canstar says if history is anything to go by, the banks will cut select savings rates next Friday.

NAB will reduce its standard variable home loan rates by 0.25 per cent starting from Monday, August 25.