Banks pull sneaky Grinch move on savers before Christmas

IT’S the time of year when households are already burdened with soaring Christmas expenses. And for cash savers, it’s about to get a whole lot worse.

CASH savers have been hit by a Grinch move from lenders who have quietly shaved down interest rates just weeks out from Christmas.

The rate moves are tipped to cost savers millions of dollars a year and at a time when many households are burdened with soaring expenses during the Christmas and New Year period.

Analysis by financial comparison website Mozo revealed since the start of November multiple big banks including National Australia Bank and ANZ are among those who have dropped some savings account interest rates.

This includes NAB who dropped their Reward Saver’s conditional bonus rate by 0.05 per cent to 2.5 per cent, while ANZ reduced their Online Saver’s base rate by 0.2 per cent to 0.8 per cent.

The Dr. Seuss Grinch balloon floats down Central Park West during the recent Macy's Thanksgiving Day Parade in New York City.

A base rate is the amount of interest a customer earns each month when they don’t meet the conditions of a bonus rate.

A bonus rate applies when the customer sticks to withdrawal and deposit conditions that the account specifies.

And just this week lender Westpac-owned RAMS dropped their saver account’s base conditional base rate by 0.2 per cent to 2.8 per cent.

Lender ING’s Savings Accelerator base rate has fallen by 0.15 per cent to 1.35 per cent.

Mozo spokeswoman Kirsty Lamont said cuts will hit older Australians the hardest because many rely on interest returns. “It’s a very unwelcome Christmas present for the nation’s savers, this is a sneaky time of the year to cut rates because most Australians are preoccupied with Christmas shopping,’’ she said.

Christmas is already a tough time when it comes to finances.

“We’ve seen the rates slashed on some of the nation’s most popular savings accounts and that’s going to cost savers millions of dollars in lost interest.”

She urged savers to hunt for more competitive interest rates and “move money to an account that is paying a decent rate.”

The Reserve Bank of Australia board kept the cash rate on hold at 1.5 per cent this year and savings interest rates have remained at low levels around the two or three per cent mark for several years now.

Tribeca Financial’s chief executive officer Ryan Watson urged customers to be proactive in scoring themselves better savings interest rate deals.

“Banks as a rule take their existing clients for granted — when cash interest rates drop, it is time for consumers to start shopping around,’’ he said.

“Challenging your existing bank with comparative cash rates you have sourced from alternate providers will force your bank to provide you with a better deal.”

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Originally published as Banks pull sneaky Grinch move on savers before Christmas