Bank deposit customers ‘getting fleeced’ after ANZ, NAB, CBA and Westpac pass on rate hikes selectively
The major banks are holding their ground by making highly-selective deposit rate changes, despite pressure from the Albanese government to pass on rate hikes to the majority of accounts.
The major banks are holding their ground by making highly-selective deposit rate changes, despite pressure from the Albanese government to pass on rate hikes to the majority of accounts.
Commonwealth Bank and Westpac on Thursday rounded out the big four responses to the Reserve Bank’s ninth successive rate hike on Tuesday, which saw variable mortgage rates raised by 25 basis points, or the same amount as the official cash rate.
But the banks separately only passed the rate hikes on to a small number of deposit and savings accounts, which is likely to raise the ire of Treasurer Jim Chalmers and those that rely on savings rates as part of their retirement income.
The competition regulator is slated to probe the area, at the government’s request, given banks have dragged the chain on rate changes for deposit products while passing through nine official rate increases to borrowers in their entirety.
“It’s just exacerbating the current problem,” said Sally Tindall, RateCity’s research director. “Customers don’t need their banks playing games with them … for many Australians it will require them to move accounts (to benefit from higher rates).”
Ms Tindall said much of the issue was “complacent savers” were still earning historically low rates of interest on their accounts, as the banks were only raising a few deposit account rates.
“They are getting fleeced,” she added.
RateCity’s analysis shows 15 banks offering a rate of more than 4 per cent to all adult customers, albeit that may increase as further and smaller banks apply their own rate changes. But for those with online savings accounts at the big four banks, the highest ongoing rate earned is 1.6 per cent at CBA, while the lowest is ANZ’s online saver at 0.55 per cent. ANZ is encouraging customers to its newer Plus account.
Canstar’s analysis showed base deposit accounts across the sector – that pay only an ongoing rate – had risen by an average of 1.83 per cent, compared to 3.25 percentage points in RBA hikes, since April last year.
Canstar’s Steve Mickenbecker said: “Some savers have been rewarded for their patience, while others have missed out altogether.”
CBA, the nation’s largest home lender, said mortgage rates would rise by 25 basis points, effective February 17. The bank is lifting the rate on its GoalSaver account, with bonus interest, by 75 basis points to pay 4 per cent per annum, as it seeks to make up ground with the RBA hikes.
Customers need to ensure the balance at the month’s end is higher than at the beginning of the period to earn the bonus interest, otherwise they are paid 0.25 per cent per annum on GoalSaver. Changes on that account are effective on Friday.
CBA is also raising rates on its Youthsaver account, with bonus interest, which is increasing by 50 basis points to 4 per cent. The bank will extend the availability of its 12-month term deposit special of 4 per cent per annum.
CBA’s head of retail banking Angus Sullivan said: “The savings rates increases we are announcing today build on higher rates we have announced across a number of savings products during the past few months.”
The bank has, however, kept its popular online savings account unchanged at 1.6 per cent.
Westpac on Thursday said home loan variable rates would rise by 25 basis points effective February 21, as it also outlined selected rate changes for deposit holders.
The Westpac Life account, with bonus interest, will rise by 25 basis points to 4 per cent per annum, while the bank’s eSaver will see a similar increase to 4 per cent for new customers for the first five months.
Westpac has a 12-month term deposit paying up to 4.1 per cent per annum for customers that open an account or renew online.
“We know at this time of year, some customers are reassessing their household budgets and looking for ways to manage their money. We have a number of tools available in the Westpac app to help customers track their spending and manage their finances,” said Chris de Bruin, Westpac’s head of consumer and business banking.
“While the majority of our customers continue to be well-placed to navigate the rising rate environment, we know some might be feeling uneasy amid growing cost of living pressures. If customers are concerned, we encourage them to give us a call.”
Macquarie Bank on Thursday also raised variable home loan rates by 25 basis points and was the only bank to pass through an across the board change to its everyday savings account, which does not have conditions. That account will see a rate rise of 10 basis points to 3.8 per cent per annum on balances up to $250,000.
Banks are preparing for a jump in loan losses and a marked slowing in the economy as rates continue their upward march, after the RBA this week signalled at least two further increases. The RBA is seeking to rein in higher inflation.
ANZ was first out of the blocks among the big four to announce rate changes following the RBA’s move on Tuesday.
The bank said it would raise variable home loan rates by 25 basis points effective from February 17. ANZ will also lift the rate on its Plus savings account by the same amount to 4 per cent per annum on balances of less than $250,000, effective on February 14.
All of ANZ’s other deposit rates are under review. The bank last week increased the rate available on one new 12-month term deposit to 4.1 per cent annually.
Over at National Australia Bank, it flagged changes to its variable home loan rates late on Tuesday, raising them by 25 basis points. The bank waited until Thursday to announce deposit rate changes, with mortgage and savings rates changes effective on February 17.
NAB’s iSaver account standard variable rate and introductory rate rise 25 basis points to 1.35 per cent and 4 per cent respectively, while the bank’s reward saver increases by the same amount to 0.35 per cent. The reward saver bonus rate lifts by 75 basis points to 4 per cent.
