Major banks slash savings rates ahead of RBA’s announcement

The major banks have slashed their deposits and savings rates, just days before the RBA will announce the nation’s official cash rate.

In a blow for savers and retirees, the major banks are offering their customers lower interest rates ahead of the Reserve Bank’s next meeting.

More than a month on from the RBA February rate cut, Commonwealth Bank, Westpac and NAB subsidiary ubank all announced on Monday they were slashing term deposits and savings interest rates for their customers.

Australia's four big banks Commonwealth, Westpac, NAB, ANZ have announced they will reduce interest rates for savers. Picture: Newswire

CBA has reduced its six-month, 10-month and 12-month term deposit offerings by 0.10 per cent, with its highest available rate now at 4.50 per cent for 10 months.

NAB owned ubank has dropped its popular bonus interest saving rate by 15 basis points to 5.10 per cent for balances up to $100,00 and 10 basis points to 4.65 per cent for balances more than $100,000. To be eligible for the bonus rates, customers have to deposit $500 a month into the account.

Westpac and its affiliates St George, BankSA and Bank of Melbourne have also reduced their special term deposit rates by 0.10 per cent for 11 months. They are now offering 4.50 per cent for in-branch customers or 4.60 per cent for those who apply online.

The fall in Westpac savings rates comes after the second biggest home lender announced it had reduced its variable rate home loan to 5.84 per cent.

Canstar data insights director, Sally Tindall said, Westpac and ANZ had gone head-to-head for the lowest variable rate in a bid to attract new customers.

“For months ANZ has had the lowest variable rate among the big four banks with its digital-only home loan, closely followed by CBA. This move sees Westpac leapfrog CBA and leave NAB in the wind,” she said.

Savers will now get less on their money. Picture: NewsWire / Nicholas Eagar

ANZ previously announcedit would axe the 2.25 per cent introductory bonus on its Online Savers account earlier this month as well as cut its Progress Saver interest rate by 0.10 per cent.

On February 18, the RBA board dropped the official cash rate by 25 basis points to 4.10 per cent.

But markets are widely predicting the RBA will wait until May for its next rate cut, meaning the central bank is expected to hold rates when board members meet on March 31 and April 1.

Commonwealth Bank head of economics Gareth Aird said the recently released labour stats – when 53,000 Aussies left the workforce as opposed to an expectation of 30,000 gaining employment – “completely blindsided” markets.

“We don’t think the RBA will be swayed by (last Thursday’s) labour market data at the April board meeting. That is, we still expect the board to leave the cash rate on hold and resume normalising the cash rate in May with a 25bp rate decrease,” he said.

Westpac economist Ryan Wells concurred it was “unlikely the RBA will read too much” into the labour force data.

NAB chief economist Alan Oster previously predicted four more 25bp cuts to take the cash rate to 3.1 per cent in February 2026.

“Based on what we’re seeing in terms of inflation, we would expect them to cut again in May, August and then maybe November,” Mr Oster said.

Originally published as Major banks slash savings rates ahead of RBA’s announcement