Savings rates falling short: Which deposit-takers have increased saving rates?
55 deposit-takers increased savings rates following the RBA’s cash rate increase in May, with the average rate up just 17 basis points
6 June 2022
- Top ongoing at call ongoing bonus savings rate is 1.40% through Great Southern Bank, with the average ongoing savings is 0.50%
- There have been 138 increases to savings accounts since the RBA’s 25 basis point rate rise last month
- Big four bank average on-going at-call savings rate is 0.26% , 114 basis points below the 1 leading rate
- Top 1 year term deposit is 2.90% through AMP Bank, firstmac and Goldfield’s Money, 167 basis points above the average of 1.23%
- The top rate for younger savers up to the age of 35 is 3% through BoQ, while the leading big bank rate is 2% through Westpac for savers up to 30 years old
- There have been 563 increases in term deposit rates in the past month, with the average 1-year term deposit rate increasing 53 basis points over the past month to 1.23%
Mozo’s latest analysis reveals at-call savings account interest rates are falling short with deposit takers holding back some of last month’s official interest increase from savers.
Mozo’s database shows there have been 138 increases to at-call savings rates in the past month, with the big four bank average on-going at-call savings rate still just 0.26%, 114 basis points below the leading rate. It also shows the average rate is only up 17 basis points from 0.33% to 0.50% since the start of May, well below the 25 basis point cash rate increase.
When it comes to the leading rates, Mozo found that Great Southern Bank is offering one of the highest rates at 1.40%, while NAB and Westpac are offering the highest on-going rate (conditional 0.50%) among the big four banks.
The analysis comes as the Reserve Bank is set to meet again tomorrow to consider a further increase to the cash rate amid the backdrop of falling household savings with the latest ABS figures showing the household saving ratio fell to 11.4%. (Excludes at-call savings rates for savers under 30 years of age.)
There’s still not a lot of good news around for the nation’s savers with ongoing rates on some of the most popular savings accounts failing to fire,” says Mozo spokesperson, Tom Godfrey.
“At a time when cost of living pressures continue to hit home, if you’re trying to get a return on your cash your best bet might be to consider a term deposit as at-call savings account rates are not showing many signs of life.”
Mozo’s database shows there have been 563 increases in term deposit rates in the past month, with the average 1 year term deposit rate now 1.23%. The highest one year term deposit rate is now 2.90% through AMP Bank, firstmac or Goldfield’s Money. Investing $10,000 for one year's term deposit at 2.90% will see you earn $290 in interest, compared to just $43 at an average rate of 0.43% through the big four banks.
“If you don’t need to access your cash in the short term, term deposits might offer better returns than savings accounts,” Godfrey says.
“It seems clear deposit takers are continuing to build their capital reserves on the back of higher term deposit rates. With household spending increasing and the cash rate likely to continue to rise, it seems deposit takers are taking the opportunity to lock in their customers’ cash.”