CBA cuts savings rates again 

Commonwealth Bank has dropped savings rates, bringing it in line with NAB at the bottom of the big four for depositors.

CBA has cut its savings rates for the sixth time since November last year, this comes as the bank’s deposits have not kept pace with home lending (Photo by William WEST / AFP)

Commonwealth Bank has cut savings rates for the sixth time since November last year despite no cuts to the overall cash rate.

The move by CBA leaves borrowers getting nearly half as much interest as they received 11 months ago.

CBA wiped 0.05 per cent off the max rates on GoalSaver, YouthSaver accounts, which are only available to those who grow their balances each month.

The GoalSaver Account now offers a max rate of 0.30 per cent, while the YouthSaver product, pitched at savers under 18, offers 0.55 per cent.

Intro rates on CBA’s NetBank Saver accounts, were slashed 0.07 points down to 0.33 per annum.

Since November 1 last year CBA has wiped 0.45 per cent off its GoalSaver and YouthSaver accounts.

The bank has also slashed 0.7 per cent off its NetBank Saver Account from 0.40 per cent off the intro rate to 0.33 per cent.

Savers will get just 0.05 per annum on NetBank Saver deposits.

However, the move by CBA brings the bank’s conditional savings rates in line with NAB at 0.3 per cent.

ANZ offers 0.35 per cent, while Westpac offers 0.4 per cent.

The cuts follow the decision in November last year by Reserve Bank of Australia to drop rates to 0.1 per cent.

CBA’s latest results reveal the bank’s deposit books have failed to keep pace with the massive boom in the bank’s lending.

The deposit to funding ratio dropped from 74 per cent last financial year to 73 per cent.

CBA deposits lifted by 9 per cent last financial year, with customers putting $64bn into the bank’s accounts, mainly into transaction and savings accounts.

RateCity research director Sally Tindall said CBA had chipped away at savings rates over the past 10 months.

“Australia’s largest bank might be paying peanuts to its savings customers, but other banks are still offering rates four times higher if you shop around,” she said.

“Just beware, most savings accounts come with fiddly terms and conditions to get the maximum rate, so make sure you qualify.”

Ms Tindall said there were nine banks offering ongoing savings rates above 1 per cent.

“Young savers can get access to even higher rates if they know where to look,” she said.

“Westpac is handing out up to 3 per cent to Australians aged 18 to 29. That’s staggering considering CBA’s offering the same cohort a maximum ongoing rate of just 0.3 per cent.”

ING offers the highest ongoing savings rate on accounts with no age restrictions, at 1.35 per cent.