RBA tipped to cut interest rates tomorrow as coronavirus outbreak continues to roil global economy
Amid fears the coronavirus outbreak will hasten a recession, the Reserve Bank will meet ahead of schedule tomorrow, with analysts expecting interest rates to drop to a fresh low of 0.25%.
“The RBA is under extreme pressure, following the US Federal Reserve’s extraordinary measure of slashing their official rate by 100 basis points,” said Mozo’s banking expert Peter Marshall.
“Other central banks around the world are implementing similar measures where they can, so it’s not surprising that the RBA is readying to take action.”
In a statement issued on Monday, the RBA said it would soon be introducing a bond purchasing program to protect against further economic fallout.
This comes after the US Federal Reserve decided to slash its benchmark interest rate to near zero and relaunch its GFC-era quantitative easing program.
In a move that will prove instructive to central bankers around the world, the Fed will purchase Treasury bonds and mortgage-backed securities totalling $700 billion in a bid to flush the American economy with cash.
Going down the same path would be a first for Australia. While RBA Governor Philip Lowe gestured towards the possibility months ago, he made clear QE would only be implemented if things were dire.
Details of the plan will be announced on Thursday.
RELATED: RBA prepares for bond buying after US Fed cuts rates to near zero
Minutes from the RBA’s March 3 meeting show the board recognised the potential of the virus to derail economic activity, “particularly in the education, transport and tourism sectors.”
“The uncertainty associated with the outbreak was also likely to affect household spending and business investment in coming months,” they added.
Members acknowledged that even before the virus had begun to roil the domestic economy, progress towards full employment and the board’s inflation target of 2-3% had been sluggish.
They also considered the chance more rate cuts would further inflate property prices, but ultimately decided that a lower cash rate was necessary to get the economy back up and running again.
So if you’re wondering where to keep your savings now that interest rates are set to drop further, visit our savings account comparison page to compare your options.
Savings account comparisons on Mozo - last updated February 27, 2021
Bonus Saver Account
Maximum rate
standard interest rate
Govt Deposit Guarantee
1.20% p.a. (for $0 to $250,000)0.10% p.a.(for $0 and over)Yes up to $250,000Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.
Winner of a Mozo Experts Choice Award 2021 in the Regular Saver category.^ No monthly account fees and no minimum balance requirements.
CompareCompareBonus Saver Account
Winner of a Mozo Experts Choice Award 2021 in the Regular Saver category.^ No monthly account fees and no minimum balance requirements.
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.
- Access
- BPay, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Bonus Saver Account
Serious Saver
Maximum rate
standard interest rate
Govt Deposit Guarantee
0.30% p.a. (for $0 to $1,000,000)0.15% p.a.(for $0 and over)Yes up to $250,000No withdrawals in the month. Bonus rate for first 4 months, reverting to 0.15% rate after*
$0 monthly account fee. Link to any Australian bank account.
CompareCompareSerious Saver
$0 monthly account fee. Link to any Australian bank account.
- account fee per month
- $0.00
- Maximum rate conditions
- No withdrawals in the month. Bonus rate for first 4 months, reverting to 0.15% rate after*
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the Serious Saver
Online Saver
Maximum rate
standard interest rate
Govt Deposit Guarantee
1.10% p.a. (for $0 to $500,000)0.35% p.a.(for $0 and over)Yes up to $250,000Bonus rate for the first 4 months from account opening
No account keeping fees. No minimum balance required. Unlimited phone and internet transactions.
CompareCompareOnline Saver
No account keeping fees. No minimum balance required. Unlimited phone and internet transactions.
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account.
Read our Mozo Review to learn more about the Online Saver
Flexi Saver
Maximum rate
standard interest rate
Govt Deposit Guarantee
0.25% p.a. (for $0 to $5,000,000)0.05% p.a.(for $0 to $5,000,000)Yes up to $250,000Increase balance by at least $300 in the month
No upfront or ongoing fees. Unlimited free transactions. Great for regular contributions.
CompareCompareFlexi Saver
No upfront or ongoing fees. Unlimited free transactions. Great for regular contributions.
- account fee per month
- $0.00
- Maximum rate conditions
- Increase balance by at least $300 in the month (excluding interest)
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
Read our Mozo Review to learn more about the Flexi Saver
Hero Saver
Maximum rate
standard interest rate
Govt Deposit Guarantee
0.80% p.a. (for $0 to $250,001)0.01% p.a.(for $0 to $5,000,000)Yes up to $250,000Minimum deposit of $200 and no withdrawals in the month.
Interest is calculated daily and paid monthly. Automatic payment feature. No minimum opening balance needed.
CompareCompareHero Saver
Interest is calculated daily and paid monthly. Automatic payment feature. No minimum opening balance needed.
- account fee per month
- $0.00
- Maximum rate conditions
- Minimum deposit of $200 and no withdrawals in the month.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the Hero Saver
^See information about the Mozo Experts Choice Savings Accounts Awards
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