Leading banks are racing to cut interest rates offered to savers, despite the Reserve Bank leaving the official cash rate on hold this month, as households flood banks with deposits.<\/p>\n
ANZ on Friday cut the full rate on its progress saver account from 3.5% per year to 3.4% despite the RBA leaving its target rate unchanged <\/a>a week earlier in a shock move.<\/p>\n Westpac dropped its reward saver rate by 0.05% in June, taking the bank\u2019s total cuts to the rate to 0.65% since February. The RBA has only cut its target rate by 0.5% over that period.<\/p>\n Both banks have also cut rates on their alternative savings products over the year, in line with the Reserve Bank.<\/p>\n Ubank has slashed its rate by a much greater 0.9% throughout 2025. On Tuesday, Ubank cut its savings rate to just 4.6%, while adding a temporary bonus for new customers and a higher threshold on account balances.<\/p>\n Bendigo Bank dropped its EasySaver rate by 0.1% in July, according to Canstar tracking.<\/p>\n Major lenders have cut the rates offered to savers faster than the RBA has cut its own key interest rate since the start of 2024 \u2013 narrowing returns paid to customers and boosting bank profits.<\/p>\n Rates have fallen further for standard or online accounts, which have no conditions, though conditional bonus account rates are also sliding as banks cut their losses. Only four banks are now offering widely accessible accounts with interest rates of 5% or more, Canstar\u2019s database shows.<\/p>\n Graph<\/a><\/p>\n The slide is a sign banks are taking advantage of Australians\u2019 high demand for savings accounts instead of competing for deposits, according to Sally Tindall, the data insights director at Canstar.<\/p>\n \u201cMoney in the bank is at a record high, so banks aren\u2019t having to compete for people\u2019s deposits,\u201d she said.<\/p>\n \u201cAustralians are absolutely focused on putting their funds away for a rainy day [so] the banks are flush with cash.\u201d<\/p>\n Guardian Australia has previously asked major banks about their decisions to trim unconditional savings rates<\/a>, pushing customers towards conditional rates, before cutting the conditional rates as well<\/a>.<\/p>\n A Westpac spokesperson in June said interest rates were affected by market pressures.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Afternoon Update<\/p>\n Our Australian afternoon update breaks down the key stories of the day, telling you what\u2019s happening and why it matters<\/p>\n Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n \u201cIn making interest rate decisions, we consider a range of factors including the cost of funds and the broader market environment, balancing the needs of both borrowers and savers,\u201d the spokesperson said.<\/p>\n Lenders have enjoyed increased freedom to cut rewards for savers as the volume of savings rises, with workers setting aside a rising proportion of their incomes as cost-of-living pressures ease.<\/p>\n National data released in May showed the proportion of household income saved rather than spent had risen to its highest level since 2022.<\/p>\n