ING offers 5.4 per cent monthly savings rate
Banks are slashing interest rates, but there is one bank offering savers a hefty 5.4 per cent on their money.
Interest Rates
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While homeowners might be pleading for the RBA to cut rates again on Tuesday, savers are already feeling the pinch.
But there are some simple things customers can do to ensure their money isn’t wasting away.
Canstar data insight director Sally Tindall advised everyone, from savers chasing higher interest rates to homeowners chasing a discount, to shop around and find a deal that works for your specific situation.
“The current market leader for the highest monthly saving rates, assuming you can meet the monthly terms and conditions is ING at 5.40 per cent,” she said.
“Their rate before the cash rate cut was 5.5 per cent and only dropped it by 0.10 per cent, but they cut the base rate significantly and boosted the bonus rate.”
“So if you find that you are not meeting those monthly terms and conditions, every single month, your rate drops down to 0.05.”
“That’s how they managed to put that very competitive rate on the table.”
Ms Tindall urged Aussies who are not meeting their monthly terms and conditions to look for a new account, which might offer a better base interest rate, citing stats from the ACCC released at the end of 2023 that showed 71 per cent of savers weren’t getting the bonus interest rate applied because they did not meet the conditions of the deal.
“Rate cuts are not coming across the board, keep an eye on what your bank and others are offering and if you are missing those monthly terms and conditions,” she said.
The warning comes just days ahead of the Reserve Bank of Australia meeting on Tuesday, where they are widely predicted to slash interest rates by 25 basis points to 3.85 per cent.
Ms Tindall said competition between financial institutions means they are moving on both home loan and savers rates outside of the RBA, with Aussies being urged to keep an eye out for what is on the market.
“What we saw last rate cut was the majority of savings rates got a hair cut,” she said.
“Since then, some banks have come through and given these haircuts another trim so we have really seen some savings rates shift south.”
Stats previously released by APRA showed households had a record $1.6 trillion sitting in savings accounts.
Ms Tindall warned despite the large amount of savings available, this is rarely something the banks fight to get access to.
“While deposits, over recent years, have become an attractive way for banks to fund mortgages, with this amount of money in the system, banks don’t have to fight tooth and nail between each other for it,” she said.
Canstar warns, with the cash rate likely to continue to fall, savings accounts could soon start with a three instead of a five.
Mortgage wars continue
On the other side, the mortgage war between the majors is giving Australian households the chance to save ahead of the RBA rate cut.
An increase in competition among financial institutions has led to falling fixed and variable interest rates.
Ms Tindall said the banks were trying to grow their loan books, which was a “fantastic opportunity” for existing mortgage holders who were willing to negotiate with their lenders.
“The banks are starting to move ahead of the RBA, they are moving in response to competition,” she said.
“These cuts we see outside the RBA cycle, they tend to be reserved for new customers, so if you’re not taking advantage of it by haggling with your bank or refinancing, you might not get that benefit from this increasing competition.”
BOQ and Police Bank are now offering the lowest fixed-rate home loans, becoming the first in some time to offer loans starting with a “4”.
Originally published as ING offers 5.4 per cent monthly savings rate
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