Reserve Bank of Australia keeps the cash rate on hold again
ANALYSIS: While homeowners have been revelling in the record-low interest rates, many Australians have more to lose as the RBA kept rates steady today.
Interest Rates
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SAVERS have been hit with dozens of falls to interest rate deals in 2017 and there’s no reprieve in sight.
While homeowners have been revelling in the record-low interest rates environment — the Reserve Bank of Australia has kept the cash rate on hold again today at 1.5 per cent — savers have been seeing their returns on fixed deposits continuing to diminish.
And retirees are among the hardest hit — some lenders have dropped their fixed rate deals by as much as 50 basis points in the past month.
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New analysis by financial comparison site finder.com.au has found rates on dozens of term deposit accounts have been slashed this year making it harder for savers to get decent returns on their pools of cash.
The site’s spokeswoman Bessie Hassan said the falls should force deposit holders to go on the hunt to find more competitive deals.
“Savers will have to work harder to boost their savings with the average term deposit rate sitting at 2.65 per cent,’’ she said.
“Anyone who relies on their savings to generate income — such as retirees — will be hit hard by this latest news of further cuts to term deposit rates.”
For home loan customers on a $300,000 30-year loan the average standard variable rate is 4.8 per cent and the monthly repayments are $1578.
The average three-year fixed rate deal is 4.33 per cent and monthly repayments are $1489.
St George Bank’s chief economist Besa Deda said the cash rate was likely to stay on hold for the entire year — particularly with increasing house prices in Sydney and Melbourne in 2017.
“The risk is they (the RBA) will leave the cash rate on hold this year, if they do move the cash rate it is likely to be lower,’’ she said.
“If it was to cut the cash rate again then those retirees and others that rely on cash deposits, that would make it harder for them to save.”
Originally published as Reserve Bank of Australia keeps the cash rate on hold again
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