Will the RBA cut rates again in July?

With the RBA’s next meeting less than a week away, it's looking more and more likely that we’ll see another reduction to the cash rate. RBA Governor, Philip Lowe said as much a few days ago, stressing that while the economy’s vital signs have remained fairly stable, there’s a lot of room for improvement. 

Why so soon?

In a recent speech to the Committee for Economic Development of Australia in Adelaide, Reserve Bank Governor, Philip Lowe pointed to less than ideal employment figures as a sign that another reduction to the cash rate could be in order.

“We remain short of the unemployment rate associated with full employment, there is significant underemployment and there is further potential for labour force participation to increase when the jobs are there,” he said.

Wage growth, which is closely tied to inflation, has also been sluggish. While wages have trended upwards somewhat over the past year, growth has been modest - particularly in the last two quarters - and confined mostly to the private sector.

“It is not unrealistic to expect a further reduction in the cash rate as the Board seeks to wind back spare capacity in the economy and deliver inflation outcomes in line with the medium-term target,” Lowe said.

At the same time, the Reserve Bank Governor admitted that there are limitations to what monetary policy can do, and urged the government to take steps of its own to stimulate the economy. 

A two-pronged approach focusing on increased spending on infrastructure and encouragement of investment and innovation within firms could see some much-needed growth in employment, he advised.

What will another rate cut mean for mortgages?

When the RBA cut official interest rates last month, we were pleasantly surprised by the amount of lenders who passed on the full cut to their home loan customers —  42 in total. But according to Mozo’s banking expert, Peter Marshall, borrowers shouldn’t count on their bank’s generosity this time round.

“While most banks passed on the full RBA rate cut last time it's unlikely they will do so again. Expectations were high that the banks should do the right thing following the Royal Commission, but there's little chance that will apply to the next rate cut,” he said.

“Smaller lenders however really compete on rate so they will have to implement the full cut to keep up with their competition.”

What about savers?

As for deposits, the outlook is grim. In the time since the RBA last cut we’ve seen 41 providers reduce rates for savings accounts and 67 reduce rates for term deposits. If the Board does go ahead with the cut in July, this trend will only continue. 

“Another rate cut is terrible news for savers. Term deposit rates have been eroded for many months now, so even the best rates are hardly worth considering,” said Marshall.

“To get the best rates savers have to be prepared to do their research, then switch their money to whichever savings accounts are offering the top rates that they can meet the bonus rate conditions for.”

With many ongoing savings rates heading towards 0%, particularly those offered by the big banks, it’s more vital than ever that Australians shop around. Check out some high interest savings accounts below, and if you’d like a more comprehensive look, be sure to visit our savings account comparison page.

Savings account comparisons on Mozo - last updated 19 July 2024

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first 4 months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2024 Mozo Experts Choice Award winner.

  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

  • 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

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Glide transaction account.

    Start saving and earn interest with just a $20 deposit and make 5 eligible transactions each month. No fees or penalties for withdrawing money.

  • Savings+Bonus

    5.00% p.a. (for $0 to $250,000)

    2.00% p.a.(for $0 to $250,000)

    Yes up to $250,000

    Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.

    Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.

  • Mozo Expert Choice Badge
    Savings Maximiser

    5.50% p.a. (for $0 to $100,000)

    0.55% p.a.(for $0 and over)

    Yes up to $250,000

    For customers who have an Orange Everyday account, deposit $1000 into a personal ING account, make 5 eligible transactions and grow their nominated Savings Maximiser account 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.^


^See information about the Mozo Experts Choice Savings Account Awards

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