Minimal love forecasted for savings accounts in November

We’ve endured yet another month dominated by savings account interest rate cuts.

Mozo’s data team counted 68 cuts last 30 days – with no rate rises in sight – which brought the average ongoing savings rate to 0.55%. 

November started with a bang, as Up cut its former top-rate account by a whopping 50 basis points to 1.10%. Its fellow October rate laters UBank and 86 400 also joined in the interest cutting spree throughout last month, bringing their going bonus rates down to 1.46% and 1.35% respectively.

There have been reductions across the board, whether you access bonus interest by meeting monthly criteria, chase high introductory rates, or stick to a solid base rate. Check out what each type of interest option looks like right now in the table below.

How does the RBA affect your savings account interest rate?

The next big event on the financial calendar is the Reserve Bank of Australia’s decision on whether or not to cut the cash rate. 

The cash rate – which is currently at a record low of 0.25% – is set by the RBA to stabilise the economy by balancing lending and savings interest rates. This number works as a benchmark which financial institutions consider when setting their own rates

There’s currently strong speculation the RBA will reduce the cash rate again on 3 November, which could drag savings rates to new lows. 

Mozo’s banking expert Peter Marshall explains why some banks may follow the RBA’s lead:

“Even though rates have been cut heavily over the last six months, there's just no appetite from the banks to get new deposits.”

“The RBA has been conducting a range of programs aimed at making funding costs for banks cheaper,” Marshall says. 

“This has resulted in banks having little use for money they have to pay retail deposit rates for – these are the savings accounts or term deposits the everyday Aussie might hold.”

If you’re a silver lining-seeker currently paying back a loan, the upside is some financial institutions may pass on savings to borrowers.  

“Home loan rates should fall. I'm tipping we will see more cuts to fixed than variable rates, and will see interest reductions on some personal loans,” Marshall says.

However, Marshall says not to hold your breath for any credit card interest rate cuts this time around. So if you are regularly tapping that plastic fantastic, make sure you pay back your credit card within the interest-free period.

Be prepared for whatever the rest of November brings with Mozo’s savings account comparison page.