Commonwealth Bank customers take hit as bank shaves savings rates

Savers already struggling with low deposit rates won’t like the latest move from one of Australia’s big four banks.

Commonwealth Bank has dealt a blow to savers with the major bank slashing savings rates on deposit accounts, including the financial product it offers to kids.

The big four bank has shaved five basis points from its NetBank Saver and Youthsaver accounts, as the ongoing low interest rate environment sparked by the coronavirus pandemic has placed downturn pressure on savings potential.

CBA’s NetBank Saver now attracts a five-month introductory rate of 0.9 per cent and an ongoing rate of 0.05 per cent thereafter.

Its Youthsaver account, which is commonly associated with the bank’s Dollarmites school banking program, has been clipped to a maximum rate of 1.05 per cent.

CBA has cut savings rates by 0.05 per cent. Picture: NCA NewsWire/Bianca De Marchi

It is the fifth time this year since the bank has cut both accounts. The bank’s adult standard saver has been slashed by 75 basis points since the start of the year, while its youth deposit account has been cut by 80 basis points.

Lower savings rates significantly impact retirees who traditionally hold their money in savings accounts to accrue interest income from the applicable rate.

Canstar executive Steve Mickenbecker said the ongoing cuts to deposit accounts made Australian savers the financial losers of 2020.

“Retirees may not be suffering searing mortgage stress but living with slow burn of knowing that their savings will be largely eroded before they expect interest rates to climb to supplement their retirement living,” he said.

“Even young people have been sucked into the COVID-19 vortex, with many losing their casual jobs and near half of the interest they could be earning.”

Canstar analysis shows that someone with $10,000 sitting in a CBA youth account since the start of the year has missed out on $31 of additional interest payments following the cuts.

Originally published as Commonwealth Bank customers take hit as bank shaves savings rates