CBA quietly slashes deposit rate on popular CommSec account
Three million CommSec investors face stealth cuts to their returns after CBA slashed rates on a popular account, amid other changes.
Commonwealth Bank has quietly slashed the interest rates on a popular cash management account used by the majority of retail investors in Australia, while also doubling the amount required to earn the highest rate.
With more than three million users, CBA-owned CommSec is by far the country’s most popular online broker.
The bank states that a Commonwealth Direct Investment Account is the “preferred cash management account for CommSec share traders”.
This means that the majority of retail investors who use CommSec – roughly 40 per cent of the market – will do so through a CDIA to settle trades.
But CBA has quietly cut the rates offered to investors with a CDIA, some by as much as 0.85 percentage points. The lender also doubled the amount required to earn the highest rate, from $500,000 to $1m.
The Australian has spoken to several investors who use CommSec, all of whom said they had received no communication about the slashed rates.
Instead, CBA simply issued two print media notices a month and a week before the changes took effect, which is the bare minimum required in their terms and conditions.
In a press release published when the new rates came into force, CBA announced that balances held in its CDIAs had grown by 14 per cent since mid-2024, largely driven by younger investors and SMSFs attracted to high yield cash accounts amid market volatility.
In response, the bank said it was capitalising on this turn to cash amid market volatility by unveiling a new account called CommSec Notice Investor.
“(It’s) a high-interest savings account to help Australians earn more on surplus cash while preserving the flexibility to move in and out of markets,” the release stated.
Spruiking the new account, CommSec managing director James Fowle said that “for investors, cash is no longer a passive parking spot – it’s part of their portfolio strategy”. Mr Fowle added: “CommSec Notice Investor will empower our customers to take a more strategic approach to cash management alongside the CDIA – combining competitive returns with the convenience of our integrated digital platforms.”
Yet, nowhere in the press release or any communication to customers did the bank mention that it would be slashing the rates for its CDIAs.
A spokesperson for the bank said: “In line with the launch of CommSec Notice Investor, we updated interest rate tiers on the CDIA to reflect that this account is used for everyday transactions.”
“Roughly 90 per cent of CDIA accounts have a balance under $5000 and will now receive a better rate after the changes than previously,” they added.
This is only true in so far as it relates to the most recent rate for balances under $5000, which was 0.05 per cent. As of mid-June this year, the rate for those accounts with under $5000 was 0.1 per cent – the same as the current rate, meaning there has been little change for investors in five months.
The CommSec Notice Investor account also requires users to set a withdrawal notice period of either two or seven days, compared to instant access with the CDIA.
It comes as several of the major lenders have been cutting their deposit rates across the board, despite the cash rate remaining on hold since August.
Last month, for example, ANZ cut rates on its key savings accounts by 0.1 percentage points. Meanwhile, Westpac and its regional subsidiaries St George, Bank of Melbourne and Bank SA cut the base rate on their bonus saver accounts by 0.15 percentage points, but boosted the bonus rate by the same amount, affecting customers who don’t meet the monthly terms and conditions.
Canstar data insights director Sally Tindall said the “fine print has never mattered more”.
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