More big 4 cuts as Westpac slashes savings account rates

Less than a month after ANZ slashed rates for its Online Saver account, Westpac has become the latest big four bank to cut interest rates on its savings accounts. Of course the good news is, there are still more competitive rates around, if you know where to look.

As of this morning, Westpac has cut rates on both its Westpac Life Account and Westpac eSaver Account. With the bonus rate dropping from 1.20% p.a. to 1.10% p.a., the maximum ongoing interest rate for Westpac’s Life Account has now dropped from 1.65% p.a. to 1.55% p.a. 

The Westpac eSaver was hit even harder, with the five month introductory rate dropping to 1.45% p.a., leaving savers with a maximum rate of 1.55% p.a. for the first five months (0.10% p.a. ongoing).

This marks the latest in a string of savings cuts from the big four in 2020, starting in January with NAB’s slashed interest rates to its iSaver and Reward Saver accounts. 

Westpac savers may take heart from the fact that ongoing rates for these two accounts are still notably higher than the average big 4 ongoing rate for savings accounts, although at 0.82%, the bar is set pretty low. In fact, the average ongoing rate for up-and-coming online/app-based banks is more than twice that, at 1.73%*.

Neobanks take on the big four

So where can you find a more competitive rate in the new decade? While it’s no secret that savings rates aren’t as good as they were ten years ago, especially after multiple cuts to the official cash rate last year, it is still possible to find a more competitive interest rate for your savings stash.

In the past few years, neobanks and online banks have really taken the lead on savings’ interest rates. Currently the top savings bonus and base rates to be found in the Mozo database, are all with neobanks**. 

RELATED ARTICLE: Neobank Report 2020: Digital banking in a new decade

App-based banks 86 400, Up Bank and Xinja are right now tied in the top spots in the Mozo database for the highest bonus saver and base rates, all offering ongoing interest rates as high as 2.25% p.a.

Xinja Stash Account

• 2.25% p.a. no-strings-attached base rate.
• There are no conditions to achieve this rate! That’s right, as this is a base rate you can earn 2.25% p.a. on balances up to $245,000 without having to jump through any hoops, such as making a minimum deposit each month or making a certain amount of card payments regularly to get it.

86 400 Save Account

• Maximum ongoing interest rate of 2.25% p.a. on balances up to $300,000. This is made up of a base rate of 0.40% p.a. and a bonus rate of 1.85% p.a.
• You’ll have to deposit at least $1,000 per month into either your savings account or 86 400 Pay Account to achieve the full 2.25% annual interest rate.

Up Saver Account

• The Up Saver Account comes with a base rate of 0.50% p.a. and a maximum ongoing rate of 2.25% p.a., available on balances up to $50,000. 
• The full 2.25% p.a. interest comes as a no-strings-attached rate for the first four months, after which you can still earn it by making five successful card purchases each month with your linked Up Bank Everyday Account.

So, feel like giving your savings stash a new lease of life? Why not head to Mozo’s savings accounts comparison page to see what other interest rates are out there. Or if you’re keen to learn more about the future of banking, why not head to our neobanks hub to see what digital or online banks are currently available in Australia. Here’s to a 2020 with better savings rates!

*Average interest rates taken from the Mozo database, correct as of Wednesday 5th February 2020.

**Information correct as of Thursday 13th February 2020.