The RBA held the cash rate steady at 3.85 per cent this month, but banks have still been cutting interest rates for savers. (Source: AAP/Getty)
ANZ has cut the interest rate on its popular savings account despite the Reserve Bank of Australia (RBA) opting to hold the cash rate steady last week. The Big Four joins other banks like NAB and Bendigo Bank in quietly cutting savings rates over the last month.
ANZ today cut the maximum rate of its Progress Saver by 0.10 per cent to 3.40 per cent. The bank previously passed on RBA’s May interest rate cut in full to savings customers, lowering rates on its key accounts one week after the cut.
NAB cut the rate of its Reward Saver account by 0.05 per cent on June 20, bringing the total rate to 4.35 per cent. Bendigo Bank cut the rate on its EasySaver account by 0.10 per cent on July 1 to 3.05 per cent.
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Canstar data insights director Sally Tindall said ANZ was the latest bank to “sneak in” a savings interest rate cut, following two earlier cash rate cuts this year.
“While the spotlight has been firmly on mortgage holders, savers — which are the majority of Australians — have quietly been taking hits of their own,” she said.
“Two of the big four banks have sliced select savings rates in the past month, despite no move to the cash rate.
“While cuts of 0.05 and 0.10 percentage points may seem trivial on paper, for customers doing all the right things to meet monthly conditions, it’s yet another frustrating backwards step.”
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Canstar data insights director Sally Tindall said there were only a handful of banks offering savings rates over 5 per cent and these may soon disappear. (Source: Supplied) · Source: Supplied
Just four banks offer at least one savings rate of 5 per cent or more: BOQ, Westpac, MOVE and ING.
But if the RBA cuts the cash rate as anticipated next month, Tindall said the highest ongoing rates would “almost certainly sink into the ‘4’s’”.
It comes after NAB cut its term deposit rates earlier this week, with cuts of between 0.5 and 0.20 per cent across multiple terms. ANZ also trimmed its 8-month Advance Notice term deposit by 0.10 per cent last week.
The unemployment rate rose 4.3 per cent in June, this week’s ABS data revealed, up from 4.1 per cent in May.
Employment increased by 2,000 people during the month, but the number of officially unemployed people jumped by 33,600.
Commonwealth Bank economist Belinda Allen said the data helped support the case for an August rate cut.
“One hurdle has now been removed for an August rate cut and suggests even with a much higher than expected trimmed CPI print the RBA should deliver a 25 basis point cut,” she said.
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Westpac economist Ryan Well said the data strengthened the “already-strong case to deliver the next rate cut in August”.
AMP chief economist Shane Oliver said the data leaves the RBA “on track to cut rates in August”.
“With unemployment breaking to its highest since the pandemic, and June jobs data showing broad-based weakness, it’s now hard to describe the labour market as tight. It also supports the view that the RBA should have cut this month,” he said.
Betashares chief economist David Bassanese, who correctly predicted a hold in July, said the unemployment data was a “slam dunk” for an August rate cut.
The major banks all expect the RBA will cut interest rates at the August meeting. They are then split on how many more interest rate cuts will follow.
Here are their current forecasts:
CBA: Two more cuts in August and November to bring cash rate to 3.35 per cent
Westpac: Four more cuts in August, November, February and May to bring cash rate to 2.85 per cent
NAB: Three more cuts in August, November and February to bring cash rate to 3.10 per cent
ANZ: Two more cuts in August and November to bring cash rate to 3.35 per cent
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