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 23 October 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

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  • 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

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