Pain intensifies for savers as average ongoing rate plummets to 0.99%
The outlook for Australian savers just keeps going from bad to worse with new figures released today revealing a concerning new threshold has just been crossed.
According to savings account figures in the Mozo database, the average ongoing savings rate has dropped below 1.00% for the first time since Mozo started tracking rates back in January 2012.
The average ongoing rate, which combines 184 different personal savings accounts with either an ongoing rate or ongoing bonus rate (which have minimum requirements), now sits at just 0.99%.
“While the recent Reserve Bank rate cuts will have delighted Australian homeowners and eased mortgage stress, the same is certainly not true for savers,” said Mozo Director, Kirsty Lamont.
“For the first time in over a decade the average ongoing rate in our database has dropped below 1.00%, with many banks now offering paltry savings returns of 0.10% and below.”
Are savings rates at record lows?
To put the current rate into perspective, the average ongoing savings rate in the Mozo database in November 2014 was 2.53% - almost triple that of the current average.
As the graph below shows, the savings slide has essentially tracked the official cash rate over the past five years. Since November 2014, the cash rate has dropped from 2.50% to today’s level of 0.75%, though the correlation is likely to provide little solace for savers.
It goes back even further though.
Historical figures from the Reserve Bank stretching back to September 1989 (data isn’t available beyond that) reveal that savings account rates have not hit current low levels at any time in the past 30 years.
Lower rates, diminishing returns
Just how much of an impact has the drop actually had on the interest Aussies can accrue from their savings accounts though?
Let’s run through a scenario using the Mozo savings calculator.
Regular saver Tim has already managed to save $10,000, which he adds $100 to each fortnight when he gets paid. If Tim was getting the average return from November 2014 of 2.53% he would end up with a balance of $18,915 after three years, including $1,088 in interest.
In comparison, Tim would end up with a balance of $18,244 after three years if he was earning today’s average rate of 0.99% - a difference of $671.
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While ongoing savings rates have been tumbling, there are still a number of options available for savers willing to meet minimum deposit requirements each month.
For example, here are five of the highest bonus rate savings accounts currently* in the Mozo database.
| Maximum Rate | Requirements | |
|---|---|---|
| MyState Bank - Bonus Saver Account | 2.25% (up to $150k) | $20+ deposit and 5 card transactions each month |
| 86 400 - Save Account | 2.25% (up to $100k) | Min $1,000+ deposit per month into Save or pay account |
| Up - Saver Account | 2.25% (up to $50k) | Min 5 card transactions per month with Up debit card |
| BOQ - Fast Track Saver Account | 2.15% (up to $250k) | Min deposit of $1000 into linked Day2Day Plus account |
| UBank - USaver with Ultra Transaction Account | 2.10% (up to $200k) | Min deposit of $200 or more into either account |
For more details, including a complete overview of each account’s rate and requirements, make sure you check out the linked review.
Otherwise for even more great introductory and ongoing savings account offers, check out the table below, or head over to the Mozo savings account comparison table to compare more than 200 different savings accounts from 60 banks.
*Accurate as of November 18, 2019.
Compare savings accounts
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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.
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first 4 months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Macquarie Savings Account
-
High Interest Savings Account
5.75% p.a. (for $0 to $250,001)
4.40% p.a.(for $0 to $250,001)
Yes up to $250,000
Bonus rate for the first 4 months from account opening
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.
CompareCompareHigh Interest Savings Account
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.
- Maximum rate
- 5.75% p.a. (for $0 to $250,001)
- standard interest rate
- 4.40% p.a.(for $0 to $250,001)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus rate for the first 4 months from account opening, reverting to standard variable rate. Rate shown is for Personal customers and is subject to change. Different rates apply to Business/SMSF customers.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Rabobank High Interest Savings Account
-
Savings Maximiser
5.50% p.a. (for $0 to $100,000)
0.55% p.a.(for $0 and over)
Yes up to $250,000
Deposit $1,000 into a personal ING account, make 5 eligible transactions with a linked Orange Everyday account and grow the balance 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.^
CompareCompareSavings Maximiser
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.^
- Maximum rate
- 5.50% p.a. (for $0 to $100,000)
- standard interest rate
- 0.55% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must be linked to an Orange Everyday transaction account to receive the bonus rate. Where multiple Savings Maximiser Accounts are held, the bonus rate is only applied to one nominated account.
Read our Mozo Review to learn more about the ING Savings Maximiser
-
MoneyMAX Account
No Current Offer
4.75% p.a.(for $1 and over)
Yes up to $250,000
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
CompareCompareMoneyMAX Account
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
- Maximum rate
- No Current Offer
- standard interest rate
- 4.75% p.a.(for $1 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- n/a
- Access
- BPay, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Branch access for deposits only.
Read our Mozo Review to learn more about the Unity Bank MoneyMAX Account
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Savings Accelerator
3.55% p.a. (for $0 to $50,000)
2.85% p.a.(for $0 to $50,000)
Yes up to $250,000
New customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Accelerator
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 3.55% p.a. (for $0 to $50,000)
- standard interest rate
- 2.85% p.a.(for $0 to $50,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- New ING personal savings customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000. Reverts to variable ongoing rate.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the ING Savings Accelerator
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^See information about the Mozo Experts Choice Savings Account Awards
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