CBA has again slashed interest rates on several deposit accounts – a move that could adversely impact many of its savers.
Australia’s largest bank has cut five basis points from its savings accounts for the second time this month and the fifth time since the Reserve Bank of Australia’s (RBA) last rate cut in November.
The bank’s standard NetBank saver now has an introductory five-month rate of 0.4% before reverting to an ongoing rate of 0.05%, while the cash rate on its conditional Goal Saver account has been reduced to 0.35%, currently the lowest on offer among the Big Four.
CBA has also slashed the rate on its YouthSaver account to a maximum rate of 0.6%
Sally Tindall, research director at RateCity.com.au, said CBA savers were getting hit with a series of micro-cuts from the bank.
“Since the November 2020 cash rate cut, the bank has cut its two main accounts, the NetBank Saver and the GoalSaver, five times each,” she said. “The cuts might be small, but they’re starting to add up.”
CBA, however, was not the only bank to succumb to the pressure of a low interest environment. Macquarie Bank has also cut the ongoing rate of its savings account by 0.25% to just 0.95%.
“ING is still holding firm, with an ongoing rate of 1.35% although they are tightening up the criteria to qualify for this rate, while Westpac is still offering 3% for people aged 18 to 29,” said Tindall.
According to RateCity’s database, a total of 50 banks have slashed more than 170 different savings rates since the start of the year.
The latest figures from the Australian Prudential Regulation Authority (APRA) showed that household deposits have increased by $125bn over the past year, although the pace is starting to slow down, Tindall said.
“While some of this extra cash is sitting in offset and transaction accounts, many Australians have squirrelled it away into savings accounts, making it increasingly challenging for banks to pay out decent returns,” she added.
“Interestingly, both CBA and Westpac’s total deposits from households took a step backwards this month, despite an overall rise across all banks – one indication people might be starting to shop around.”