Savings rates set to plummet further as October RBA cut looms

The Reserve Bank’s monthly meeting takes place tomorrow, and homebuyers and mortgage holders are waiting with bated breath for another reduction to official interest rates.

Of course, the inverse of all this is that savings rates are also set to drop. Assuming banks reduce their rates by 0.25%, an October cut would bring the average interest rate for savings accounts down to 0.90%.

“With a third, and possibly a fourth cut likely this year, there is significant downward pressure on savings rates,” said Mozo interest rate expert Peter Marshall.

“A 25 basis point cut next week could sound the death knell for some of the most popular standard savings accounts in the country.”

How much have the big banks cut already?

Since June’s cut, we’ve seen reductions to savings accounts from all 77 deposit-takers in our database. Even some of the highest interest savings accounts have lost some of the glimmer they had earlier in the year.

The big banks have certainly been leading the charge. All up, ANZ, CommBank, NAB and Westpac have hacked off between 0.30% and 0.45% from their average savings rates following both June and July’s rate cuts:

  • ANZ cut 0.30%
  • CommBank cut 0.35% 
  • NAB cut 0.45%
  • Westpac cut 0.35%

It’s safe to say the interest rate environment isn’t going to change course any time soon, so savers are going to have to settle in for the long haul. 

Right now, it pays to know what kinds of rates are out there so you can switch if you’re getting subpar returns from your current account. Our savings account comparison page is a good place to start.

“If you are looking for a savings account, currently the leading ongoing bonus rate in our database is 2.50% available through the Bank of Queensland or online banks 86 400 and Up. That’s 1.35% higher than the average,” said Marshall.

“If you don’t need to access your savings on a regular basis you could also consider hedging against a further official rate cut by switching to a fixed term deposit.” 

So if you’re eyeing term deposits - which are a good way to guard against falling rates - our term deposit comparison page can help you find the right one.

Savings account comparisons on Mozo - last updated 14 June 2024

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  • Savings Account

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    4.75% p.a.(for $0 to $1,000,000)

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    Bonus variable rate is available for the first four months.

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    5.10% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    Deposit at least $200 to either Spend, Bills or Save account from an external source each month.

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  • PremiumSaver

    5.45% p.a. (for $0 to $250,001)

    1.50% p.a.(for $0 and over)

    Yes up to $250,000

    Increase balance by $200 by the end of each month

    Reward yourself with a higher rate for your good savings habits. Rabobanks’s PremiumSaver is simple - receive the maximum rate when you grow your balance by at least $200 each month (T&Cs apply). Plus, your savings help our Aussie farmers produce the food we love to enjoy.

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    Savings Maximiser

    5.50% p.a. (for $0 to $100,000)

    0.55% p.a.(for $0 and over)

    Yes up to $250,000

    For customers who have an Orange Everyday account, deposit $1000 into a personal ING account, make 5 eligible transactions and grow their nominated Savings Maximiser account 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.^

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^See information about the Mozo Experts Choice Savings Account Awards

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