Australians are being urged to check their savings accounts to make sure they are receiving the interest rates promised by their banks, amid concerns complex conditions could leave them out of pocket.
The Australian Securities and Investments Commission (ASIC) warned introductory, welcome and bonus interest rates can come with conditions or only apply for a limited time.
The warning comes as Australian households hold almost $1.8 trillion in bank deposits, with the regulator concerned customers may be missing out on higher returns because of confusing account requirements.
ASIC Commissioner Alan Kirkland said banks had a responsibility to make sure customers understood the rates they were being offered and received the interest they qualified for.
“If the conditions are too complex or difficult to decipher, customers may miss out on interest they could otherwise be earning,” Mr Kirkland said.
He warned consumers not to assume they were automatically receiving the highest rate advertised by their bank, urging them to check the conditions attached to their account.
ASIC said customers should establish whether they need to make regular deposits, limit withdrawals or increase their account balance to qualify for a bonus rate, as well as how long any promotional offer lasts.
They should also check what interest rate applies once an introductory period ends and whether another account offers more suitable conditions.
“If you don’t understand the conditions attached to your account or can’t easily work out what interest rate you are receiving, contact your bank and ask them to explain it,” Mr Kirkland said.
ASIC said it would continue monitoring banks and would take action where consumers were harmed.
The regulator pointed to last year’s Federal Court ruling ordering ANZ to pay a $40 million penalty for making false and misleading statements about savings interest rates and failing to pay the promised rate to tens of thousands of customers.
ASIC has also commenced proceedings over Macquarie Bank’s advertising of its promotional Welcome Rate for new savings account customers.
The warning follows findings by the Australian Competition and Consumer Commission that, on average, 71 per cent of bonus interest accounts did not receive the bonus rate in each month during the first half of 2023.
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