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 RateRequirements
MyState Bank - Bonus Saver Account2.25% (up to $150k)$20+ deposit and 5 card transactions each month
86 400 - Save Account2.25% (up to $100k)Min $1,000+ deposit per month into Save or pay account
Up - Saver Account2.25% (up to $50k)Min 5 card transactions per month with Up debit card
BOQ - Fast Track Saver Account2.15% (up to $250k)Min deposit of $1000 into linked Day2Day Plus account
UBank - USaver with Ultra Transaction Account2.10% (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 - last updated 18 September 2021

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Boost Saver with Go Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.50% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Intro bonus rate of 1.50% for first 3 months, reverting to 1.20% after. Deposit $2,000 each month and make 5 eligible payments from your Go Account. If you are between 18 and 25 deposit $1,000.

    Enjoy a savings account bundled with a spending account. No monthly fees. New customers can earn up to 5000 bonus Virgin Money points on purchases (conditions apply). Benefit together with a joint account

    Details
  • Mozo Expert Choice Badge
    Bonus Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.

    Winner of a Mozo Experts Choice Award 2021 in the Regular Saver category. No monthly account fees and no minimum balance requirements.

    Details
  • Online Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.10% p.a. (for $0 to $500,000)
    0.35% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    No account keeping fees. No minimum balance required. Unlimited phone and internet transactions.

    Details
  • Grow Saver
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.65% p.a. (for $0 and over)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Make at least 1 deposit and no more than 1 withdrawal, including internal transfers or external payments.

    Earn a maximum interest rate of 0.65% per year. Pay no monthly fees. Set up in-app savings goals. Benefit with joint account options.

    Details
  • Fast Track Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.05% p.a. (for $1 to $250,000)
    0.05% p.a.(for $1 and over)
    Yes up to $250,000

    Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

    Earn 1.05% p.a. Bonus Interest in the following month on your Fast Track Saver Account balance. Earn Bonus Interest on your savings, with no minimum balance required.

    Details
  • WebSavings Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.00% p.a. (for $2,000 and over)
    0.05% p.a.(for $2,000 and over)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening on balances over $2,000 only, available to new customers only.

    A high interest savings account that still lets you access your cash, no monthly account keeping fees and top up as many times as you like.

    Details
  • Savings Maximiser
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $100,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    For customers who have an Orange Everyday and in each month deposit at least $1,000 into a personal ING account, make at least 5 settled card purchases using the linked ING debit card and grow the account balance.

    No ING fees. Great variable rate every month when you grow your balance each month in addition to other eligibility criteria.

    Details
  • High Interest Savings Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $250,001)
    0.25% p.a.(for $0 to $250,001)
    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Kick start your savings with the 4 month introductory variable rate. No fees, no minimum balance, no minimum monthly deposit and no minimum term.

    Details

^See information about the Mozo Experts Choice Savings Account Awards

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