NAB announces second rate cut for savers in a month

In another blow for people trying to save, a major bank has cut the interest rate on a popular account for the second time in a month.

NAB has become the latest bank to move on interest rates, cutting the rate of one of its more popular savings accounts.

NAB has announced its Reward Savers account has fallen by 0.05 per cent for a new maximum rate of 4.35 per cent, in the second cut in less than a month.

It follows a 25 basis points rate reduction on May 23 in line with the Reserve Bank of Australia’s official interest rate reductions.

Canstar called it a “small blow” for savers. Picture: NewsWire / Nicholas Eagar.

Account holders with NAB’s Reward Savers will now get a 30 basis point reduction on their money held in the account.

Canstar data insights director Sally Tindall described it as a small blow for savers who are already watching their returns slip away.

“It shows that banks don’t need a cash rate change to move the goalposts for customers. It’s a small move but a disappointing one nevertheless,” she said.

According to Canstar, NAB is not the only bank moving on rates, with Australians now having just six banks offering at least one ongoing savings rate above 5 per cent including some young adult accounts and excluding those for children.

“While the average savings rate on our database is an uninspiring 3.07 per cent, there are six banks still offering an ongoing savings rate of 5 per cent or more,” Ms Tindall said.

While each of the savings accounts comes with terms and conditions, including deposits and transactions, BOQ Future Super, BCU Bank Boss, P & N Bank Savvy Savers, MOVE Bank Growth Saver and ING Savings Maximiser all still offer rates above 5 per cent.

Westpac Life Spend and Save also offers younger Aussies a 5 per cent savings rate, but comes with the major caveat of being for those aged 18 to 29.

NAB announces a small cut to popular savings account. Picture: NewsWire / Gaye Gerard

Ms Tindall warned if the Reserve Bank cuts the cash rate again in July, which the bond market says has an 83 per cent chance of happening, the days of a 5 per cent savings rate could be behind us.

“If the RBA wields its knife again in July or August, savings rates starting with a 5 won’t last beyond winter,” she said.

“Term deposit rates are, unsurprisingly, falling faster than at-call savings rates, as banks continue to bake in further cash rate cuts into the fixed rate term.

“If you’re someone who likes the certainty and security a term deposit can bring, time is of the essence as these rates are likely to keep on falling in the weeks ahead.”

Originally published as NAB announces second rate cut for savers in a month