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

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 274 savings accounts.
Last updated 13 July 2024 Important disclosures
  • 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 4 months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2024 Mozo Experts Choice Award winner.

  • 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.

  • Savings+Bonus

    5.00% p.a. (for $0 to $250,000)

    2.00% p.a.(for $0 to $250,000)

    Yes up to $250,000

    Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.

    Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.

  • Bonus Saver Account

    5.00% 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 Glide transaction account.

    Start saving and earn interest with just a $20 deposit and make 5 eligible transactions each month. No fees or penalties for withdrawing money.

  • Life - 18-29 years old

    5.20% p.a. (for $0 to $30,000)

    2.00% p.a.(for $0 and over)

    Yes up to $250,000

    Make 5 eligible card purchases per month with a Westpac Choice account and min 1 deposit and higher balance than at the beginning of the month in Life savings account.

    Are you 18 - 29 years of age? Earn up to a generous variable interest rate on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30,000.


^See information about the Mozo Experts Choice Savings Account Awards

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