To say March has been a busy month in the world of interest rates, particularly savings account rates, would be an understatement.
But with everything else going on we don’t blame you if your priorities have been elsewhere and you’ve missed some of the many changes that have come about as a result of two separate Reserve Bank interest rate cuts in March.
Unfortunately for savers, the bad news is that there’s been no let up in the savings account rate reductions we’ve been witnessing over the past year.
In fact, according to the latest figures from the Mozo database, the average ongoing interest rate for all savings accounts now sits at just 0.85%.
“Most banks have cut headline rates by 25bp, but there are a few that have made deeper cuts than that,” said Mozo Banking Expert, Peter Marshall.
“Cuts resulting from the first March RBA cash rate reduction have largely come through now, and we haven't seen many follow on from the second cut, but that's not to say they won't happen. Regardless, I expect at call deposit rates to continue to soften for a while.”
Keen to see the details? We’ve wrapped up some of the major changes in recent weeks below.
Introductory rate savings accounts
Refresher: An introductory rate attached to a savings account only applies for a limited time, generally 3-6 months, before it reverts to a lower, ongoing base (or standard) rate.
- AMP boosted Saver Account by 54 basis points
- Macquaire and AMP now offering joint highest intro rate
- Heritage Bank, Rabobank and Citi still competitive despite cuts
Perhaps the biggest savings account news in the past week was AMP’s decision to boost the maximum rate available on its Saver Account by a substantial 54 basis points.
The move means that the Saver Account now has an introductory rate of 2.65% (for balances up to $500,000) - the joint highest rate in the Mozo database. The rate is available for the first six months for new customers, after which it drops down to a 1.05% base rate.
AMP’s Saver Account now joins Macquarie Bank’s Savings Account, with a maximum rate of 2.65%, as the joint highest rate in our database. Macquarie’s rate is available on balances up to $250,000 for the first four months, after which it drops to a base rate of 1.35%.
The majority of the other players with introductory savings rates at the higher end of the Mozo database all cut rates throughout March, with Heritage Bank’s Online Saver, Rabobank’s High Interest Savings Account and Citi’s Online Saver all reduced by between 20 and 25 basis points.
However, the maximum rates on all of these accounts remain above the 2.00% mark and well above comparable big bank offers.
Bonus rate savings accounts
Refresher: An ongoing bonus rate is the rate you can receive by fulfilling bonus criteria such as making a minimum deposit or a certain number of card transactions each month. If these conditions aren’t met the base rate will apply instead.
- Neobanks 86 400 and Up cut rates
- Highest ongoing rate now 2.00%
- Popular online accounts from UBank, ING and ME also fell
Previously offering the joint highest ongoing bonus rates in the Mozo database at 2.25%, neobanks 86 400 and Up Bank both reduced their respective maximum rates by 25 basis points in early March.
While the neobanks weren’t alone in making cuts, it does mean the joint highest ongoing rate in the our database is now 2.00%.
At the time of writing, that 2.00% maximum ongoing rate is available with 86 400’s Save Account, BOQ’s Fast Track Saver, MOVE Bank’s Bonus Saver, MyState Bank’s Bonus Saver Account and Up Bank’s Saver Account. Check out the linked reviews for all the details.
A number of online banks also reduced the maximum ongoing rates available on their popular savings accounts. ING’s Savings Maximiser, ME’s Online Savings Account and UBank’s USaver with Ultra Transaction Account were all cut by between 15 and 25 basis points.
Meanwhile, all four major banks (ANZ, Commonwealth Bank, NAB and Westpac) made cuts to their respective bonus rate offers by at least 25 basis points during the month.
Base rate savings accounts
Refresher: The base rate (or standard rate) is the ongoing rate you’ll receive on your savings with no strings or conditions attached.
- Neobank Volt cut rate twice, still offering highest unconditional rate
- Macquarie increased offer by 100 basis points
The most significant unconditional savings account news in the past few weeks has been neobank Volt’s decision to cut its Savings Account interest rate twice. Volt Bank first reduced its rate by 25 basis points on March 13th and made a second cut this morning, meaning its rate has dropped from 2.15% to 1.65% in less than a month.
However, with fellow neobank Xinja’s decision earlier in March to freeze new savings customer intakes, the Volt Savings Account still remains the highest ongoing base rate available in the Mozo database.
Meanwhile, Macquarie Bank upped the base rate on its Savings Account by 100 basis points. As we mentioned further above, this account also features an introductory rate of 2.65% for the first four months on balances up to $250,000.
RELATED: Need a change of scenery for your rainy day fund? Here’s how to choose a savings account that’s right for you
Ready to find a new home for your savings? Start your search by checking out the hot offers in the table below, or head on over to our savings account comparison hub for the latest rates from a range of banks.