- NAB slashes savings rates
Australians with savings accounts will earn less interest as a result of the Reserve Bank’s latest cut.
Major banks including NAB and Macquarie Bank have slashed rates on their savings accounts in the wake of the RBA’s decision this week.
NAB, a Big Four bank, cut its Reward Saver rate by 25 basis points to 4.4 per cent. The bank’s iSaver rate also fell by 25 basis points to 4.65 per cent but only for four months.
NAB’s quarter of a percentage point drop in saving rates were in line with the RBA’s Tuesday rate cut of 25 basis points, that took the cash rate to 3.85 per cent for the first time since June 2023.
While RBA rate cuts are good news for borrowers, they are bad for savers who are either trying to save up for a mortgage deposit or live off the age pension.
Canstar data insights director Sally Tindall said savers were set for more punishment.
‘This is just the start of what will be an onslaught of rate cuts for savers,’ she said.
Macquarie Bank has also cut its savings account rate by 25 basis points to 4.85 per cent.
Australian savers are getting punished following the Reserve Bank’s latest rate cut
‘These cuts from big bank, NAB, and challenger bank Macquarie are just the tip of the iceberg,’ Ms Tindall said.
‘Savers need to stay alert as some banks are moving quickly following Tuesday’s RBA decision.’
Ms Tindall slammed the big banks for using RBA rate cuts to get publicity for reducing mortgage rates, only to provide relief for borrowers after punishing savers.
‘It’s disappointing to see some banks chop savings rates ahead of their mortgage rates,’ she said.
‘One day, it would be fantastic to see a bank reverse this order to benefit its mortgage and savings customers, rather than themselves.’
The latest Reserve Bank rate cuts mean term deposit rates have fallen under five per cent.
Heartland offers the highest rate of 4.75 per cent for six months.
Qudos offers 4.5 per cent for one year, 4.3 per cent for two years and 4.1 per cent for three years.
Canstar data insights director Sally Tindall said savers were set for more punishment
Judo Bank offers 4.35 per cent for four years and 4.45 per cent for five years.
The futures market is expecting the Reserve Bank to cut the cash rate from 3.85 per cent now to 3.1 per cent by the end of 2025.
That would imply another 75 basis points of cuts on top of Tuesday’s relief for home borrowers, meaning more bad news for savers.
‘If you’ve already seen your savings rate drop, don’t get mad, get even by taking your savings rate shopping,’ Ms Tindall said.
Reserve Bank of Australia Governor Michele Bullock confirmed this weeks that the board had considered an even bigger 50 basis point rate cut on Tuesday.
Headline and underlying measures of inflation are now both within the RBA’s two to three per cent target, giving it more scope to cut interest rates, as it monitors the effects of Donald Trump’s tariffs on economic activity.
