Aussie savers feel the sting of RBA rate cut
Since the RBA’s landmark decision to slash the cash rate to a record low 1.75% this month, Aussie savers have been feeling the hit as savings account interest rates have dropped sharply.
While lenders took an average of 16 days to pass rate cuts to home loan borrowers, savings account rates were slashed quite quickly, in an average of just 11 days. In fact, some providers who have already passed on the Reserve Bank's rate cut to savings accounts have still not implemented a matching drop on home loan interest rates.
So far, 46 providers have passed on the rate cut to savers, who Mozo Director Kirsty Lamont said will be feeling the pinch sharply, with yet another interest rate cut tipped in the coming months.
“Interest rates on savings have taken a beating this month,” she said. “At the moment, savers just aren’t seeing a great return on their money.”
For a saver with $30,000 stashed away in an average rate savings account, a cut of 0.25% would mean over a 12 month period they would earn only $76 in interest. Add inflation and tax into the scenario, and savers are barely getting off the bottom line.
“Now more than ever, savers really need to be aware of what they’re doing with their money,” Lamont said. “It’s not enough to dump hard earned cash in a savings account and forget about it - savers should be hunting around for the best possible deal.”
“Bonus offers and bundling savings accounts with other banking products can provide a much needed boost to savings when interest rates fall flat like this,” she added.
Top savings accounts
|Savings account||Interest Rate||Change|
|ME Online Savings Account||3.35% with a weekly Tap & Go purchase with your ME Everyday Transaction Account Debit MasterCard||previously 3.60%|
|RAMS Saver Account||3.15% with a minimum deposit of $200 and no withdrawals during the month||no change|
|UBank USaver with Ultra Transaction Account||3.12% when $200 is deposited into either account each month||previously 3.37%|
|Australian Military Bank Online Saver||3.00% with no withdrawals in the month||no change|
|Bank Australia Bonus Saver||3.00% with a minimum deposit of $100 and no withdrawals during the month||no change|
|ING Direct Savings Maximiser||3.00% with a deposit of at least $1,000 a month and a linked Orange Everyday account||previously 3.25%|
|RaboDirect 90 Day Notice Saver||3.00% as long as 90 day notice is given before withdrawals||previously 3.20%|
Tips for getting the most from your savings account
- Search out bonus offers - Bonus offers are a great way to give your savings a boost - just make sure you keep in mind the requirements for cashing in on bonus interest, which can include minimum monthly deposits or no withdrawals.
- Set up direct deposits - Not only will this keep your savings account balance looking plump, but it’s also a great way to meet the minimum deposit requirement for any bonus offers. Set up automatic deposits, and you’ll be maximising your savings without lifting a finger.
- Jump online - Online banks often offer some of the most generous interest rates around, so go digital to score a great deal.
- Don’t be afraid to switch - If your bank isn’t delivering the value for money that you’re looking for, give them the boot! Check out some of these high interest savings accounts instead, and start making the most of your hard earned stash.
So what are you waiting for? Pick up a great savings account deal now and beat low interest rates.