‘Nightmare’ for Aussie savers as big four banks slash interest rates

ANZ has made cuts to its savings account rates. Source: Getty

Aussies could be faced with a tough battle if they are hoping to save up some of their hard earned cash, after ANZ became the last of the big four banks to cut its savings account rates.

Following in the footsteps of its major competitors, ANZ announced a reduction in rates on their progress saver and online saver accounts by 0.20 per cent. The cut, which was announced on Wednesday, is a drop of two basis points more than they passed onto their home loan customers weeks ago.

While the drop is certainly disheartening for hard working Australians ANZ’s rates still fare slightly better than the rest of the big four, with the bank offering the highest ongoing savings rate of 2.20 per cent. While Westpac is in the lead for their introductory rate which currently sits at 2.31 per cent for a period of five months.

Speaking about the unfortunate turn of events for Aussie savers, RateCity.com.au research director Sally Tindall said introductory rates have become the “white elephant of banking”.

“All four big banks have slashed their base rates to just 0.30 per cent interest, when inflation is sitting at 1.3 per cent,” she explained. “That’s a nightmare for anyone trying to save.”

Shockingly, data compiled by RateCity.com.au has revealed over 47 banks have dropped their savings rates since the Reserve Bank cash rate cut earlier this month, including ING, AMP, Bank of Queensland, ME Suncorp and Bendigo, in addition to the big four.

“There’s no sugar coating the outlook for savers right now,” Tindall said. “With at least one, if not two more cuts to the cash rate on the horizon, the average saving rate could fall to 1.30 per cent.

“Good saving rates might be hard to come by but it’s still worth shopping around.”

The announcement has confirmed fears from some retirees who predicted banks would lower rates on savings and term deposit accounts following news the Reserve Bank of Australia was slashing the cash rate to a historic low of 1.25 per cent.

Just days after the cut was made Tindall told Starts at 60 that retirement income-seekers across the country were already beginning to “feel the pinch”.

“The rate cut is good news for home loan borrowers but bad news for savers,” she said at the time. “Retirement income-seekers who rely on savings and term deposit rates have already started feeling the pinch, as institutions slash rates to new record-lows.

“This will make it difficult for many retirement-age Australians who rely on savings accounts to keep their heads above water.”

“The issue is that there’s currently no pressure on the banks to get more deposits on their books, so they’re not trying to entice new customers with competitively high rates, or even cash-back offers or frequent flyer points, like they would with credit cards or home loans,” Tindall added.

Have you felt the effect of the Reserve Bank of Australia’s rate cut? Are you concerned about the cuts to savings account rates?

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