The big four are always quick to raise their home loan rates, but really drag their feet to reward savers. Here’s where to find the best savings rates.
All of the big four banks have hiked their variable home loan rates by 0.5 per cent after the latest RBA increase, but not all their savers have seen the benefit of the full RBA rate rise.
Home loan rates, post August RBA hike
Owner-occupiers paying principal and interest
Source: RateCity.com.au. Note some loan-to-value ratios apply. Westpac rates effective 18 August.
While variable customers will be charged the higher interest rate from this week, it will take several weeks before their repayments rise.
The banks typically give customers a minimum of 20 to 32 days’ notice before increasing their monthly repayments.
- CBA: at least 20 days’ notice from the date of customer’s notification letter.
- Westpac: at least 30 days’ notice from the date of letter.
- NAB: at least 32 days’ notice from the date of letter.
- ANZ: at least 30 days’ notice from the date of letter.
Big four banks hike savings rates
When the big four raise their savings rates, not all customers get the full 0.50 per cent boost. In fact, they often reward new customers and ignore their existing base. Which is why it pays to shop around to get the best savings rates.
Australia’s largest bank, CBA, has increased the ongoing rate on the NetBank Saver by 0.5 per cent, but the bank will only increase the rates on its popular GoalSaver and Youthsaver accounts by just 0.25 per cent.
NAB has increased all its savings rates by the full 0.5 per cent, while ANZ has left millions of its savers out in the cold by only increasing the rate on its new ANZ Plus Save account. Westpac has increased most of its savings accounts by between 0.5 and 0.55 per cent.
Big four bank savings rate rises in August
Source: RateCity.com.au. Conditions apply for max bonus saver rates.
Although the big four bank savings rates are on the way up, they still fall well short of the market leaders.
Savings rates market leaders for all adults
Source: RateCity.com.au. Conditions for max interest rate apply. Ubank rate effective 1 Sept.
Big four bank savings rates
Source: RateCity.com.au. Note: some conditions apply for maximum rates. Westpac rate effective 18 August.
There are also banks offering decent interest rates with no monthly conditions.
Macquarie Bank has increased the rate on its transaction account to 2.25 per cent, while ANZ raised its Plus Save account to 2.5 per cent.
Highest savings rates for accounts with no monthly conditions
Source: RateCity.com.au.
The gap between the lowest and the highest savings rates is blowing out with every hike that rolls in, which makes finding a decent rate all the more important.
If you want to do right by your nest egg, look for an account that’s above the 1.85 per cent cash rate at an absolute minimum. Keen savers should now be able to get ongoing rates well above 2 per cent. In fact, you can even get above 3 per cent, but you’ll have to jump through hoops to qualify.
Macquarie Bank is also shaking things up by continuing to pass on full hikes to its transaction account. Macquarie customers can now earn 2.25 per cent on every spare dollar in their bank account, without any tricky fine print.
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