In the ever-shifting landscape of personal finance, Australians over 50 are often looking for the most secure and profitable places to stash their savings. However, recent developments have shown that even the most vigilant savers can be caught off guard. ANZ, one of the nation’s major banks, has made a move that’s left many customers feeling like the rug has been pulled out from under them.
Following the Reserve Bank of Australia’s (RBA) cash rate decision, ANZ has taken the axe to the interest rates on its savings accounts, a decision that could have a ripple effect on your financial well-being. The bank has scrapped the introductory bonus on its Online Saver account, which was previously a draw for new customers seeking a little extra on their deposits. This bonus, which was at 2.25 per cent, has been cut entirely, leaving the total maximum rate at 1.15 per cent. This comes on the heels of a 0.25 per cent cut on February 28, which was already a response to the RBA’s announcement.
But the changes don’t stop there. ANZ’s Progress Saver interest rate has also been reduced by 0.10 per cent. This brings the total bonus rate down to 3.75 per cent, a figure that plummets to a paltry 0.01 per cent if certain conditions are not met. For many savers, especially those relying on their savings interest as a supplement to their income or as a growth strategy for their nest egg, this is a significant blow.
Rachel Wastell, a money expert at Mozo, interprets ANZ’s move as a strategic push towards its digital ANZ Plus savings product, which still offers a more attractive 4.75 per cent bonus rate for customers who can grow their balance by $100 or more each month. ‘ANZ just pulled the rug out from under its savers,’ Wastell remarked, highlighting the stark contrast between the old and new rates and pointing out that better options are available, including within ANZ’s own suite of products.
The other members of the Big Four banks have followed suit, lowering their savings rates in the wake of the RBA’s decision. This creates a double-edged sword for Australians, as lower interest rates can mean cheaper loans but also less rewarding savings accounts. Commonwealth Bank, Westpac, and NAB have all made cuts to their savings account rates, leaving customers to grapple with the new financial landscape.
Commonwealth Bank reduced its GoalSaver account rate by 0.25 per cent to 4.65 per cent and its NetBank Saver account rate by 0.20 per cent to 4.90 per cent. Westpac lowered the rates for its Westpac Life and eSaver accounts by 0.25 per cent to 4.75 per cent, while NAB decreased its Reward Saver and iSaver rates by 0.25 per cent to 4.75 per cent.
In light of these changes, savers are urged to shop around. The difference between a 1.15 per cent and a 4.75 per cent annual savings rate can be substantial over time. For instance, Mozo’s analysis shows that someone with a $5,000 balance could miss out on $185 in interest over a year, while a $10,000 balance could mean forgoing an additional $369.
However, there’s still some good news for savers. Outside of the Big Four, there are still competitive rates to be found. ING’s Savings Maximiser currently offers a 5.40 per cent bonus rate for balances up to $100,000 with certain conditions, and Australian Unity has a 4.85 per cent unconditional rate for balances up to $250,000. These challenger banks, specialist banks, and smaller regional lenders are often more aggressive with their deposit rates, and they could be a better home for your savings.
As interest rates continue to shift, staying informed and proactive can make a significant difference in how you manage your savings. Whether you’re considering switching accounts or adjusting your financial strategy, exploring all available options is key to making the most of your hard-earned money.
What are your thoughts on the recent interest rate changes? Have they influenced your approach to saving? Share your insights and experiences in the comments below—we’d love to hear from you!
St George Incentive Saver a/c is paying a good interest rate and only requires a $50 increase in the balance per month. I have it schedules to be paid a week before the end of each month and have been doing it for year. Only catch is the total balance must be below $250K.