Term deposit holders bemoan RBA's rate cut
There are two sides to every story and this is certainly the case with the Reserve Bank of Australia's (RBA) decision to trim interest rates this week (October 2nd).
While loan and mortgage customers will be rejoicing at the news of the 25-point reduction, it is important to spare a thought for those who have term deposits.
Older people in particular are far from happy to see the official cash rate fall to a three-year low of 3.25 per cent, as a lot of retirees live off the interest accrued by their deposits.
Chief executive of National Seniors Michael O'Neill told the Chronicle that ageing Aussies could start to feel the pinch.
"Low bond yields, market volatility and falling interest rates are a triple whammy for seniors," he was quoted as saying.
It is not a foregone conclusion that banks will lower the rates attached to their deposits, though.
Financial institutions have been keen to push these packages in recent months and some companies have opted to ignore the RBA's guidelines by keeping their rates at a higher level in order to attract new customers.
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