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Westpac joins growing list of banks cutting savings rates

Westpac joins growing list of banks cutting savings rates

Australia’s second largest bank, Westpac, has today cut savings rates by up to 0.50 per cent across its popular accounts.

Westpac is one of six banks to cut savings rates today. Its subsidiaries St George, Bank of Melbourne, Bank SA have trimmed as well as ME Bank and Great Southern Bank (formerly CUA).

The cuts come just two and a half weeks after its big four competitor, CBA, also trimmed its savings rates.

This is the third time Westpac has cut its savings rates since the RBA lowered the cash rate in November last year.

Today’s cuts

 Savings account

Old max rate 

New max rate 

Change 

Life (all adults)0.40%0.30%-0.10%
Life (18-29 yrs)3.00%2.50%-0.50%
eSaver0.40% for 5 mths then 0.05%0.30% for 5 mths then 0.05%-0.10% to intro rate

Source: RateCity.com.au Note: To qualify for max rate for Life balance must be higher at end of month. Extra terms apply for young adults.

Westpac savings rates – then and now

Max rate

1 Nov 2020

Max rate

Today

Change

Life (all adults)0.75%0.30%-0.45%
eSaver0.75% (5 mths)0.30% (5 mths)-0.45% (intro rate only)
Cash rate 0.25% 0.10%-0.15%

Source: RateCity.com.au

Analysis of the RateCity.com.au database:

  • 24 banks have cut at least one savings rate in the last month, including CBA, Westpac, and AMP.
  • 6 banks have cut savings rates today. Westpac, St George, Bank of Melbourne, Bank, ME Bank and Great Southern Bank.
  • 0.30% is now the average ongoing savings rate for all adults.
  • 1.35% is the highest ongoing savings rate for all adults (ING).
  • 12 banks offer an ongoing savings rate of 1% or higher.

RateCity.com.au research director, Sally Tindall, said: “Westpac has caved to the pressure of the low-rate environment, cutting savings rates despite no move to the cash rate.”

“While Westpac’s main accounts now have maximum rates of 0.30 per cent, it will continue to offer bonus interest to young Australians, albeit at a reduced rate of 2.50 per cent, the equal highest on the market,” she said.

“Across the board, savings rates continue to sink to new lows with 24 lenders cutting rates in just one month, including Australia’s two biggest banks.

“As a result, the average ongoing savings rate on RateCity.com.au is now just 0.30 per cent – the lowest in our records.

“People need to be shopping around and reading the terms and conditions if they want the highest rates. For example, Westpac’s savings accounts range from just 0.05 per cent all the way through to 2.50 per cent, depending on the fine print.

“With record levels of household deposits in the bank since COVID, it’s important to proactively look for a decent rate,” she said.

Big four bank: conditional savings rates

Bank

Account

Max rate

CBAGoalSaver0.30%
WestpacLife0.30%
NABReward Saver0.30%
ANZProgress Saver0.35%

Source:RateCity.com.au. Conditions apply for max rate.

Big four banks standard savers

Bank

Product

Intro rate (3-5 mths)

Ongoing rate

CBANetBank Saver0.33%0.05%
Westpac eSaver0.30%0.05%
NAB iSaver0.35%0.05%
ANZ Online Saver0.30%0.05%

Source:RateCity.com.au Intro rate terms - CBA & Westpac 5 months, NAB 4 months, ANZ 3 months.

Highest ongoing savings accounts (no age restrictions)

Bank

Max rate 

ING 1.35%
Virgin Money1.50% for 3 mths then 1.20%
86 4001.20%

Source:RateCity.com.au $25k balance. Conditions apply for max interest rate.

Young Adults: highest ongoing savings rates

BankAccountMax rate
Westpac LifeAges 18 to 29 (up to $30K)2.50%
BOQ Fast Track StarterAges 14 to 24 (up to $10K)2.50%

Source:RateCity.com.au Conditions apply for max interest rate.

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This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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