July savings account snapshot: How to protect your cash as savings rates plummet

The EOFY has come to a rather somber close for Australia’s savers, with savings account rates dropping across the board in June. According to Mozo’s database, the average ongoing savings rate is now 0.71% p.a.

It’s no surprise this average dropped by 3 basis points (bp) over the month. Every change to at-call deposit rates recorded by Mozo in June was a reduction, with two of the big banks trimming their offerings. 

Westpac cut 5bp off its Life account, and 10bp from the eSaver introductory rate, bringing those rates to 1.00% and 0.95% respectively. Meanwhile, ANZ cut 15bp from its Progress Saver account (now 0.85%) and the Online Saver three-month introductory rate (now 0.80%). 

While Macquarie slashed the introductory rate on its Savings Account by 39bp, now down to 2.26%, it is still the highest at-call deposit rate in the Mozo database. Check out the other rate leaders below*.

*rates accurate as of July 1

How can you keep your savings growing in the new financial year?

The ongoing barrage of rate cuts might be getting savers’ spirits down, but there are a few tricks to help bolster your savings stash.

Mozo banking expert Peter Marshall says those aiming for shorter-term goals, like financing a long weekend away or buying a new computer, should dig in, do the research and consider introductory offers.

“Be prepared to look around, look beyond the major banks and put in the effort to find out which rates you can take advantage. Perhaps introductory rates or ongoing bonus rates where you can meet conditions.”

Marshall also encourages long-term savers, perhaps those aiming to make a deposit on a property, not to lose heart and keep adding to their savings accounts 

“Don’t forget about cumulative interest. An at-call deposit account generally gets paid interest every month, meaning whatever interest you do get goes straight into your account,” says Marshall. 

“If you can leave it there, you're getting more interest on a larger balance the next month. The more you can do that, the more benefit you get from that cumulative effect.”

Whatever your savings plan is, it’s always important to develop and stick to a budget, and assess all your options. Start by checking out the savings accounts below.