Commonwealth Bank cuts savings rate following RBA cut

Savers are in the crosshairs again as Australia’s biggest bank cuts deposit rates for the eighth time this year — after failing to pass on a rate cut to customers with variable home loans.

THE Commonwealth Bank has dealt another blow to savers, cutting its rates on deposit accounts yet again.

Australia’s biggest bank has cut interest rates on several accounts, including the children’s YouthSaver account associated with the Dollarmites marketing campaign.

The move comes after the Reserve Bank on November 3 cut the cash rate by 0.15 percentage points to 0.1 per cent as part of a series of stimulus measures to help the economy recover from recession.

All four of the major retail banks failed to cut their variable home loan rates following the RBA’s move.

CBA since the start of the year has cut savings rates eight times. Picture: NCA NewsWire / Gaye Gerard

However, the CBA has now cut the headline rate on its YouthSaver account more deeply. For account balances below $50,000 it will now pay interest at a rate of just 0.8 per cent a year — down 0.2 percentage points.

The rate for balances over $50,000 has been held at a negligible 0.05 per cent.

Since the start of the year the CBA, which is led by chief executive Matt Comyn, has cut savings rates eight times.

Savings products are heavily used by retirees, many of whom rely on the interest for their income.

The CBA has also cut 0.15 percentage points from the rate it pays on its standard NetBank Saver account, which now has an introductory rate of 0.6 per cent and an ongoing rate of just 0.05 per cent.

Its conditional GoalSaver account has also been clipped, with the rate paid on balances over $50,000 cut by 0.2 percentage points to 0.8 per cent, while balances under $50,000 now receive interest of just 0.45 per cent.

CBA chief Matt Comyn. Picture: Britta Campion.

Canstar finance executive Steve Mickenbecker said the CBA was the ninth bank to cut rates on deposit accounts since the RBA’s move.

“This time the cuts are bite-sized chunks between 0.10 per cent and 0.20 per cent, just like the other seven cuts this year,” he said.

“But in all, they add up to a main course-sized 1.05 per cent reduction to CBA’s Netbank Saver and 0.70 per cent to its GoalSaver.

“Other banks will join CBA in passing on last week’s RBA cash rate reduction to savers, meaning today’s cuts to savings rates won’t be the last.”

Of the big four banks, the CBA is offering the lowest ­advertised savings rates.

The CBA, National Australia Bank, Westpac and ANZ have not cut variable home loan rates in the wake of the RBA’s rate cut this month.

They have cut fixed home loan rates, which only apply to new customers or those who refinance their mortgage.

Originally published as Commonwealth Bank cuts savings rate following RBA cut