Your savings in 2020: Death by a thousand rate cuts
Interest rates on savings accounts and term deposits have plummeted in recent years. That won’t come as any surprise to the country’s long-suffering savers, but the sheer number of cuts that have been passed down by banks in the last six months might.
Since March 1, 2020, the Mozo database has recorded 1,736 interest rate cuts to bank accounts, savings accounts and term deposits. Here’s the breakdown:
- 257 cuts to bank accounts
- 635 cuts to savings accounts
- 844 cuts to term deposits
Now fair enough, a lot of Aussies probably don’t pay attention to whether or not their bank account balance is earning any interest at all, but it still means there have been 1,479 cuts to savings accounts and term deposits in just six months.
Those numbers don’t even include kids or business accounts.
As the graph above shows, the most significant flurry of cuts took place in March and April, which makes sense because it’s the period directly after back-to-back RBA rate cuts. It’s also true that the size of these cuts vary greatly - many were quite small, while others larger.
But most of all, they’ve been unrelenting.
And the actual impact hasn’t been insignificant. For example, since March 1, the average ongoing savings account interest rate in the Mozo database has fallen by 34 basis points to 0.63%.
As Mozo Director Kirsty Lamont says, these cuts have also meant that the nation’s savers have missed out on well over $1 billion in interest.
“As mortgage holders enjoy record low-interest rates, it’s no secret that the banks need to find other ways to remain profitable - and taking from Australian savings accounts is an easy way to ensure the books stay nice and plump,” she says. “By hacking away at the interest rate over the last six months, Australian savers lost out on approximately $1.6 billion.”
Steady cuts bring more pain for major bank savers
Let’s be clear, you’ll struggle to find a savings account or term deposit interest rate which hasn’t been cut in the past six months. In other words, this trend isn’t unique to the big four.
What is important to remember is that, according to APRA’s latest Authorised Deposit-taking Institution Statistics from June, 74% of total household deposits are held with ANZ, the Commonwealth Bank, NAB and Westpac.
In other words, the savings rates offered by the major banks affect a lot of Australians.
As the graph shows, if you’ve got your savings parked with one of the big four you’ll be getting a rate somewhere between 1.00% and 0.40%. And that’s if you meet the account conditions, because if you don’t you're looking at a base rate between 0.01% and 0.45%.
The exception here is the Westpac Life (18-29 years old) account which currently comes equipped with a 3.00% maximum rate on balances up to $30,000, though there are a few conditions that need to be met.
Not all is lost for savers though.
While rates have been drifting further and further down, there is still a considerable difference between the lower offers on the market, the average rate and the highest offers.
For instance, ING’s Savings Maximiser (1.65%) and MyState Bank’s Bonus Saver Account 1.65%) both offer ongoing savings rates which are currently 100 basis points higher than the Mozo average.
Meanwhile Judo Bank is offering term deposit rates well above the Mozo average - as high as 1.55% for a 3 year term.
RELATED: Term deposits snapshot: Interest rate cuts predicted to slow down in September
Ready to find a more rewarding home for your savings? Check out some of the great offers in the table below, or start comparing even more of the latest rates using Mozo’s dedicated savings account comparison table.
Compare savings accounts - last updated 29 March 2024
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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 four months.
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 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 four 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
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Mozo experts choice awards won:
- Kick Start Savings - 2024
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 . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
CompareCompareHigh Interest Savings Account
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
- 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
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Reward Saver Account
5.25% p.a. (for $0 to $1,000,000)
0% p.a.(for $0 and over)
Yes up to $250,000
Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.
Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.
CompareCompareReward Saver Account
Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.
- Maximum rate
- 5.25% p.a. (for $0 to $1,000,000)
- standard interest rate
- 0% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.
- Access
- ATM, EFTPOS, Visa Debit, Cheque book, BPay, Branch access, Phone banking, Internet banking, Bank@Post
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the IMB Bank Reward Saver Account
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Reward Saver
5.25% p.a. (for $0 to $100,000)
0.30% p.a.(for $0 and over)
Yes up to $250,000
Earn a high interest bonus rate if you hold an eligible transaction account and meet the bonus rate conditions (T&Cs apply). Only requires $1 to open. Free e-banking transactions. No monthly service fees to pay. Access your account via e-banking or the Bendigo Bank app. Not applicable to business customers.
CompareCompareReward Saver
Earn a high interest bonus rate if you hold an eligible transaction account and meet the bonus rate conditions (T&Cs apply). Only requires $1 to open. Free e-banking transactions. No monthly service fees to pay. Access your account via e-banking or the Bendigo Bank app. Not applicable to business customers.
- Maximum rate
- 5.25% p.a. (for $0 to $100,000)
- standard interest rate
- 0.30% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Grow your balance each month and must have linked Bendigo Everyday or Student Account to be eligible.
- Access
- BPay, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the Bendigo Bank Reward Saver
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Mozo experts choice awards won:
- High Interest Savings - 2024
AMP Saver Account
5.40% p.a. (for $0 to $250,000)
1.20% p.a.(for $0 to $5,000,000)
Yes up to $250,000
Enjoy a bonus rate when you deposit at least $1000 per month with the AMP Saver Account.
No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.
CompareCompareAMP Saver Account
No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.40% p.a. (for $0 to $250,000)
- standard interest rate
- 1.20% p.a.(for $0 to $5,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Ongoing total variable bonus rate of up to 5.40% per annum applies if customers deposit $1,000 in the previous month. Available only on balances up to $250,000.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Ongoing total variable bonus rate up to 5.40% p.a. is earned on the balance the month after you deposit $1,000 and is paid the following month, on balances up to $250k. Max balance per customer name is $5 million.
Read our Mozo Review to learn more about the AMP Bank AMP Saver Account
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^See information about the Mozo Experts Choice Savings Account Awards
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