Term deposit holders 'are benefiting from RBA rise'

Savers are benefiting from the rise in official interest rates thanks to high rates on term deposits, the Australian Bankers’ Association (ABA) has said.

Steven Munchenberg, chief executive of the ABA, issued a statement to defend the banks after the Australia Institute and media reports claimed that savers are being cheated.

"Nothing could be further from the truth," he said. "The Reserve Bank notes that banks are competing intensely to attract depositors. Banks increased interest rates on a range of deposit accounts after the Reserve Bank increased the cash rate on Tuesday."

Mr Munchenberg suggested that there are currently various competitive options for Australians who wish to compare term deposits and invest their cash. He noted that interest rates of over seven per cent are being offered on some term deposits, which amounts to a three per cent increase on the official cash rate.

He said the Australian Institute had referred to savings accounts in its media statement, which typically have lower rates than investment type accounts, such as term deposits and online accounts.

According to a recent report in the Australian, Australia’s richest workers have seen their wealth grow at a much faster rate than average earners in recent decades, with this income boom making term deposit investments and high returns more likely.

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