ANZ takes knife to savings rates

Savers dealt a blow as ANZ cuts savings rates, despite more people depositing their money.

ANZ’s Online Saver product now attracts a three month introductory rate of 0.8 per cent and an ongoing rate of 0.05 per cent. Picture: AFP

ANZ has slashed bonus savings rates on its Online Saver and Progress Saver products by 15 basis points.

Savings rates continue to be squeezed due to the low interest rate environment caused by the economic impact of the coronavirus pandemic.

ANZ’s Online Saver product now attracts a three month introductory rate of 0.8 per cent and an ongoing rate of 0.05 per cent.

The bank’s Progress Saver has a new savings rate of 1 per cent if the conditions of no withdrawals and a minimum monthly deposit of $10 is met.

RateCity research director Sally Tindall said ANZ also cut some of its term deposit rates by up to 25 basis points.

A standard 24-month term deposit with ANZ now offers a return of 0.45 per cent. While standard 12-month term deposits have been slashed by 20 basis points, offering a return of 0.25 per cent.

“It’s disappointing to see deposit rates fall at a time when households are increasingly focused on building up rainy day funds, but the lack of competition between the bigger banks isn’t helping,” Ms Tindall said.

RateCity said 40 banks have cut at least one savings account rate since May 1, despite no movement in the official cash rate since March.

It also noted that 76 per cent of all Australian deposit accounts now offer a maximum savings rate of less than 1 per cent.

According to April monthly banking statistics provided by the Australian Prudential Regulation Authority, all four majors have increased deposit books by more than 4 per cent compared to the same month in 2019.

“The latest APRA monthly banking statistics recorded a notable rise in deposits from households as people in lockdown put the brakes on their spending,” Ms Tindall said.

“This puts less pressure on the banks to put competitive deposit rates on the table.”

Commonwealth Bank, NAB and Westpac all offer introductory rates of 1.05 per cent on standard savings products and an ongoing rate of 0.05 per cent.

Westpac’s Life conditional savings account has the highest maximum rate compared to the other major banks, offering a rate of 1.05 per cent if the balance on the account increases every month.

CBA’s Goal Saver attracts a maximum rate of 0.5 per cent if $200 is deposited every month and an account holder does not make any withdrawals.

NAB’s Reward Saver has a maximum rate of 1 per cent if one or more deposits are made in the month and no withdrawals occur.