‘Unfair’: Major banks quietly start cutting savings rates

Frustrated Aussie savers have been urged to get one up on banks who have left them in the dark by doing one thing.

NAB has become the latest major bank to cut rates on two of its main savings accounts by 25 basis points ahead of reducing rates for mortgage holders.

According to Canstar, NAB’s new rates will come in seven days ahead of its cuts to variable mortgage rates.

Reward Saver customers will now get a new max rate of 4.75 per cent, which is down from 5 per cent.

Those with an iSaver account will now receive 4.75 per cent for four months and 1.75 per cent after that, down from 5 per cent for the first four months and 2 per cent afterwards.

Australia's big four big banks are starting to announce rate cuts for savers. Picture: NewsWire

NAB is not the only bank cutting savings rates ahead of mortgage rates.

Bank of Queensland and its subsidiary ME Bank have on Friday cut key savings rates by between 0.15 and 0.30 percentage points. They will pass on variable rate cuts for home loans on March 7 and March 8 respectively.

Westpac has already announced it will be cutting two of its key savings rates on February 28, four days ahead of when it hands out mortgage relief.

CBA has announced cuts to its savings rates; however, the bank is passing them on at the same time as it reduces variable mortgages.

ANZ’s savings rates are still under review.

Canstar data insights director Sally Tindall said while the big four banks were quick to announce the rate cuts for mortgage holders, they have been slower on the communications for savers.

“I think it is unfair on savings customers,” she told NewsWire.

“I think it’s really important for savings customers to know exactly what’s going to be happening with their savings rate in advance of when it happens.”

Ms Tindall said savings rates starting with a 5 are becoming a rarity, with just nine banks offering at least one saving rate more than 5 per cent, excluding rates for kids and introductory rates.

“The strategy should be to play the offensive and get one up on the banks by chasing a better rate elsewhere,” she said.

NAB is passing on the cuts to savings rates ahead of the reduction to mortgage rates. Picture: NewsWire / Nicholas Eagar

“The more savers shop around and switch their stash of cash to a more competitive offer, the more likely banks will be to feel the pressure and reconsider passing on rate cuts.”

NAB’s change in rates for savings accounts comes after the Reserve Bank of Australia board cut rates by 25 basis points from 4.35 per cent to 4.10 per cent.

In giving its reason for Tuesday’s cut, the RBA said inflation had fallen “substantially” from its 2022 peak and the board was confident price pressures were moving sustainably towards the midpoint of the 2-3 per cent target range.

“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance,” the board said in a statement on Tuesday.

“In the December quarter, underlying inflation was 3.2 per cent, which suggests inflationary pressures are easing a little more quickly than expected.

“There has also been continued subdued growth in private demand and wage pressures have eased. These factors give the board more confidence that inflation is moving sustainably towards the midpoint of the 2–3 per cent target range.”

Originally published as ‘Unfair’: Major banks quietly start cutting savings rates