Bank deposit interest rates: how to get the best deal now

The ACCC’s inquiry into retail deposits will not report to the government until December, but savers are being urged to act now.

An investigation into bank deposits by the Australian Competition and Consumer Commission appears to already be paying off for savers.

Since the ACCC announced on February 15 details of its retail deposits inquiry, three of the big four banks have unveiled big interest rate increases on some savings accounts.

However, other deposit products – particularly online savings accounts – have barely moved since the Reserve Bank of Australia started lifting interest rates in May 2022.

Ratecity.com.au research director Sally Tindall says there is a “melting pot of competing pressures” affecting deposit interest rates, including competitors’ moves, profit margins, RBA rises, a desire for new business and shareholder demands.

RateCity’s Sally Tindall says savers should be proactive. Picture: Tim Hunter.

“Certainly the pressure of this inquiry hasn’t hurt those outcomes for savers,” she says.

“But banks are not opening their wallets up to everyone. They are picking which accounts get a boost and which miss out, because they want to keep their profit margins healthy.”

For example, a majority of the nine RBA rate rises in the past 10 months did not flow through to banks’ existing customer rates for online saver accounts.

Bonus savings accounts – which often come with strict conditions such as no withdrawals or minimum monthly deposits – have climbed the most, with CBA, NAB and ANZ lifting those rates between 0.75 and 1 per cent in February alone. In November 2022 Westpac went large with a 0.9 per cent jump on its bonus savings rate.

Tindall says savers should be proactive and give their savings accounts a health check after every RBA rate rise, including one expected on Tuesday.

“If not satisfied, switch to a more competitive deal,” she says.

“Movement will keep competition kicking along in this segment.”

Some banks have extended their bonus rate periods for some customers, Tindall says.

“It’s fabulous to have this pressure coming from the ACCC, but don’t wait around for the final report – you can take matters into your own hands now and hopefully you will see your interest rate skyrocket,” she says.

Research group Canstar says the ACCC deposit review may prompt banks to lift their game, but it warns the conditions imposed on many savers should be examined.

“The major banks offering savings rates as high as 4 per cent is good news but still considerably below leading rates,” Canstar spokeswoman Effie Zahos says.

“Passing on rate hikes is one thing. Removing the obstacles around earning these rates will be another issue that the ACCC will need to consider.”

Originally published as Bank deposit interest rates: how to get the best deal now