CBA cut interest rates by as much as 0.30% across its savings accounts yesterday, exemplifying the tactics many banks are using to help recoup the costs incurred from reducing home loan rates by the full 0.25% March cash rate reduction. Via Australian Broker.
Two weeks before the major’s home loan reductions come into effect, the ongoing bonus rates on its Goal Saver account have been reduced by 0.25%, its pensioner security account by up to 0.25% and its Youth Saver account by 0.30%; the NetBank Saver account was unchanged, with an ongoing rate of just 0.10%
“CBA is one of six banks so far to cut deposit rates since last week’s cash rate cut, with dozens more expected to follow,” said RateCity.com.au research director Sally Tindall.
“It’ll be interesting to see how far Westpac, NAB and ANZ shave their rates, seeing as they’ve already taken the knife to some of their savings rates this year.
“In this low rate environment, finding a savings rates above inflation can feel like finding a needle in a haystack, but they are out there.”
The highest rate currently on offer is 2.25%, which can be found at neobanks 86 400 and Xinja Bank.
However, they’re “unlikely to stick around”, according to Tindall.
Last week, Xinja announced no new Stash savings accounts will be able to be opened for an indefinite period, in order to take care of existing customers.
For now, the neobank will maintain its 2.25% rate, with no strings attached and interest paid from the first dollar up to $245,000, calculated daily and paid monthly.
“When faced with higher than expected deposit flows, and an RBA rate cut, most banks would just drop deposit interest rates, hurting existing customers while chasing new ones. That’s not what Xinja is about,” said CEO and founder, Eric Wilson.
“Xinja offers a different way of banking, and that extends beyond technology to how we treat our customers.”
However, Wilson did reiterate the Stash account has a variable rate which may go up or down in the future.
“Right now, in what are turbulent times, we want to stand by the rate we have offered,” he said.
“But there are three things we have to balance: the RBA rate cut makes it more expensive for Xinja to hold deposits at the same rate before the launch of our lending program; there has been an unprecedented uptake of Xinja Bank by Australians; and now, how we – as a new bank – manage the costs of those deposits. “
