Savings rates, home loan rates, mortgage holidays: this week’s best banking news
- Westpac’s market-leading savings rate for under 29s
- Low mortgage rates, harsh lending conditions and first home buyers
- Home loan repayment holidays extended
- Business innovation inspires positivity for post COVID-19
- What a risk-based personal loan could do for you
- 44% of Aussies intend to cut spending over the next 6 months
All in this week’s best banking news recap: editor’s pick.
Westpac offers market-leading savings rate for young Aussies
This week, major bank Westpac introduced a brand new savings account that has young Aussies’ heads turning.
From July 8, the new Westpac Life account offers a market-leading 3.00% bonus interest rate for customers aged between 18 and 29 years old.
According to the Mozo database, the current average savings account rate sits at a low 0.70% so this is a massive step up but it doesn’t come without conditions to get this top rate:
- You need to be 18-29 years old
- You must make at least five transactions via a linked Westpac Choice account each month
- Your balance must grow by the end of the month
- High interest only earned on balances up to $30,000
Bear in mind though, for those you don’t meet the increasing balance criteria, but still make five transactions, they’ll receive a competitive 2.40%.
Read full article: Westpac offers young Aussie savers a new market-leading interest rate to find out more about this hot new product!
What low home loan rates and harsher lending conditions mean for first home buyers
This week, AMP made a move to determine their home loan variable rates by a customer’s loan-to-value ratio (LVR) instead of loan amount tiers.
And they aren’t the first Aussie lender to do it.
Since the emergency RBA cut to 0.25% in March this year, 15 mortgage lenders in the Mozo database have made the change, including Newcastle Permanent, Bank Australia and online lender Athena.
Essentially, it means that borrowers with higher LVRs, while they may qualify for a particular loan, will be excluded from receiving the lowest rates available. This makes it particularly hard for first home buyers to get the best rates on offer.
“It’s not an easy time for first homebuyers in terms of getting a loan, but it is an easier time to buy a property, so that’s the tradeoff,” said Mozo property expert Steve Jovcevski..
He explained that first home buyers seeking lower rates should be “saving as much of a deposit as they can. Because prices aren’t going to skyrocket any time soon, they’ve got a bit of time to do this.”
Read full article: Home loan rates at record low: Could tougher lending rules shut out first homebuyers? to find out what else Jovcevski said about this type of lending.
Mortgage repayment holidays: struggling Aussie borrowers receive extensions from banks
On Wednesday, major Aussie banks announced they will be deferring paused loan repayments for an additional four months.
Despite many retail and business customers resuming their loan repayment schedules full (if not, partially), other borrowers are still feeling the financial pinch of COVID-19.
“This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially” said Australian Banking Association CEO Anna Bligh.
So far 800,000 Australian banking customers have relied on the loan deferral scheme, 60% of which are residential home loans. According to recent Mozo data, these repayment holidays extensions are set to help avert $75 billion in potential home loan defaults.
Read full article: More support on the way as banks extend mortgage holidays for struggling borrowers
92% of small businesses have hope for the future through innovation
Released this week, the Amazon Launchpad Innovation Report revealed that 92% of Aussie small businesses are feeling resilient despite COVID-19.
In fact, 28% have used the time as an opportunity to innovate within their business, such as find new revenue streams (27%), launch online eCommerce business (23%), create new products or even transform current ones (18%).
Similarly, an additional 35% of small businesses claimed that lockdown enabled them to review and re-jig their current business plan, and 38% said it gave them the opportunity to inspire creativity.
Read full article: Small businesses innovate to beat challenges of 2020 and check out some hurdles that stand in the way of businesses’ ability to change and adapt.
The benefits of risk-based personal loans
While it may be thought thatthat risk-based personal loans only benefit customers with good credit, it’s not entirely the case.
Risk-based pricing or personalised interest rates, refer to the interest rate that a bank calculates according to a customer’s credit rating.
According to Mozo banking expert, Peter Marshall, this type of lending has become more popular over the past 10 years. He explained that these loans don’t only benefit consumers with a good credit history but also offer an opportunity to borrow for those with a low credit rating.
“There’s also a benefit to borrowers that might have a low credit rating, because a lot of lenders who offer a single rate may have tighter criteria about who they will give that rate to,” he said.
“Borrowers with a low credit rating might find themselves locked out of some lenders based on that criteria.”
Read full article: How a risk-based personal loan could benefit you to find out what David Norman, chief operations officer from online lender NOW FINANCE, says about how risk-based lending works.
44% of Aussie consumers will cut spending for the rest of the year, says MyState Bank
According to MyState Bank, 44% of Aussies are intending to hold back on spending on non-essentials for the rest of 2020.
In a recent survey, they found that consumers want to spend less on things like:
- Gym memberships: 44%
- Public transport: 43%
- Home furnishing and decor: 38%
- Takeaway food: 38%
- Clothing and footwear: 36%
Alternatively, the research showed that over 25% of Aussies foresee themselves spending more on both groceries and household utilities over the next six months.
“For many Australians, the introduction of social distancing measures has been an opportunity to save more than ever before on expenses from public transport to dining out at restaurants,” said Heather McGovern, MyState Bank general manager, customer experience.
“Being isolated has also compelled more Australians to consider new and more innovative and cost-efficient ways of doing things, like swapping out memberships at physical gyms for fitness apps. Our research indicates that Australians are likely to prolong their savvier spending habits even after social distancing measures have lifted.”
Read full article: MyState Bank: 44% of Aussies to reign in spending for the rest of 2020 for five ways to be financially thrifty this year.
On the hunt for a brand new savings account? Take a look at some competitive options below.
Compare Savings Accounts 2020
-
Savings Accelerator
3.55% p.a. (for $0 to $50,000)
2.85% p.a.(for $0 to $50,000)
Yes up to $250,000
New customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Accelerator
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 3.55% p.a. (for $0 to $50,000)
- standard interest rate
- 2.85% p.a.(for $0 to $50,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- New ING personal savings customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000. Reverts to variable ongoing rate.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read reviews and learn more about ING savings accounts
-
Smart Saver Account
4.50% p.a. (for $0 and over)
0.05% p.a.(for $0 and over)
Yes up to $250,000
Increase account balance by any amount and make no more than two withdrawals
Work towards your savings goals with this account. Earn bonus interest when you grow your balance and make no more than 2 withdrawals each month. Earn a guaranteed standard rate of interest each month on your savings. No monthly account keeping fees to pay. Use the app or internet banking to manage your account 24/7.
CompareCompareSmart Saver Account
Work towards your savings goals with this account. Earn bonus interest when you grow your balance and make no more than 2 withdrawals each month. Earn a guaranteed standard rate of interest each month on your savings. No monthly account keeping fees to pay. Use the app or internet banking to manage your account 24/7.
- Maximum rate
- 4.50% p.a. (for $0 and over)
- standard interest rate
- 0.05% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Increase account balance by any amount (excluding interest) and make no more than two withdrawals in the month
- Access
- BPay, Branch access, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read reviews and learn more about Newcastle Permanent savings accounts
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MoneyMAX Account
No Current Offer
4.70% p.a.(for $1 and over)
Yes up to $250,000
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
CompareCompareMoneyMAX Account
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
- Maximum rate
- No Current Offer
- standard interest rate
- 4.70% p.a.(for $1 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- n/a
- Access
- BPay, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Branch access for deposits only.
Read reviews and learn more about Unity Bank savings accounts
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Bonus Saver Account
5.00% p.a. (for $0 to $250,000)
0.05% p.a.(for $0 and over)
Yes up to $250,000
Deposit at least $20 each month and make 5 Visa Debit transactions with a linked Glide account.
Open a Bonus Saver Account in under 5 minutes. There are no fees to pay or penalties for withdrawing money. Get a seamless personalised insights and online statements via the My State Bank app.
CompareCompareBonus Saver Account
Open a Bonus Saver Account in under 5 minutes. There are no fees to pay or penalties for withdrawing money. Get a seamless personalised insights and online statements via the My State Bank app.
- Maximum rate
- 5.00% p.a. (for $0 to $250,000)
- standard interest rate
- 0.05% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- 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 Glide transaction account.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read reviews and learn more about MyState Bank savings accounts
-
Bonus Saver
5.00% p.a. (for $0 and over)
0.50% p.a.(for $0 and over)
Yes up to $250,000
Bonus interest for the first four months from the account opened date. No minimum balance required. No monthly or ongoing fees or withdrawal penalties. Manage your money easily via phone or online banking or via the BCU Bank app.
CompareCompareBonus Saver
Bonus interest for the first four months from the account opened date. No minimum balance required. No monthly or ongoing fees or withdrawal penalties. Manage your money easily via phone or online banking or via the BCU Bank app.
- Maximum rate
- 5.00% p.a. (for $0 and over)
- standard interest rate
- 0.50% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening.
- Access
- BPay, Branch access, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read reviews and learn more about BCU Bank savings accounts
-
Mozo experts choice awards won:
- High Interest Savings - 2024
Savings Maximiser
5.50% p.a. (for $0 to $100,000)
0.55% p.a.(for $0 and over)
Yes up to $250,000
Deposit $1,000 into a personal ING account, make 5 eligible transactions with a linked Orange Everyday account and grow the balance each month.
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Maximiser
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 5.50% p.a. (for $0 to $100,000)
- standard interest rate
- 0.55% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must be linked to an Orange Everyday transaction account to receive the bonus rate. Where multiple Savings Maximiser Accounts are held, the bonus rate is only applied to one nominated account.
Read reviews and learn more about ING savings accounts
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^See information about the Mozo Experts Choice Savings Account Awards
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