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Savings and term deposit rates have plummeted significantly in the past year, following multiple cuts to the official cash rate by the Reserve Bank of AAlison Cheung
ustralia, new RateCity data shows.
The average maximum savings rate fell from 1.57 per cent to 0.75 per cent in the 12 months to March.
Term deposit rates took an even deeper plunge, with the average rate on a $10,000 term deposit for the 12-month period decreasing from 2.46 per cent to 1.3 per cent.
These declines are a difference of 0.82 per cent and 1.16 per cent for savings and term deposit rates respectively. On a $25,000 balance, this represents a difference of $205 a year less in interest for savings accounts and $290 for term deposits.
The RBA’s emergency rate reduction on March 19 brought the country’s official cash rate to a new historic low of 0.25 per cent, marking the first out-of-cycle rate cut since 1997.
RBA governor Philip Lowe has indicated the rate will not be hiked “for an extended period”.
While most banks focused their COVID-19 support packages primarily on their biggest home loan customers, the recent multiple rate cuts could leave regular savers high and dry.
Fifty banks cut their conditional savings account rates after the first rate cut in March, according to the RateCity database.
This means a homeowner may be paying about 2 per cent in interest annually for their mortgage, but might only be earning less than that when depositing cash in the bank.
And with the pandemic fuelling volatility in the share market, many may have decided that parking their hard-earned cash in the bank could be the best decision for them.
Savers can look at these banks which provide the highest ongoing savings account rates on the market.
| Company | Product | Max rate | Base Rate | Conditions for max rate | Comments |
| MyState Bank | Bonus Saver |
2.00% |
0.30% |
Deposit $20 and make 5 Visa card purchases on the linked Everyday or Glide account per month | On balances up to $150k |
| Bank of Queensland | Fast Track Savings Account |
2.00% |
0.20% |
Deposit $1000 into a linked Day2Day account from an external account and make 5 eligible transactions per month. | On balances up to $250k |
| Suncorp Bank | Growth Saver |
1.90% |
0.20% |
Grow your net balance by $200 or more (excluding interest) and make no more than one withdrawal during the month | N/A |
Excludes student accounts and introductory rates. Source: RateCity.com.au database, as of April 14, 2020
For 12-month term deposits of $10,000, savers may still earn about 2 per cent interest per annum with these top three accounts:
Source: RateCity.com.au database, as of April 16, 2020
Which banks have hiked its term deposit rates?
After the latest rate cut, 42 banks have raised their term deposit rates in response to the COVID-19 crisis. Here are the banks that could pay you more for locking your money away:
Big four
| Bank | Rate change |
| CBA | – Special 12-month term deposit rate 1.70% for balances from $5k to $1,999,999
– Special 8-month term deposit rate 1.30% for balances from $5k to $1,999,999 |
| NAB | – Introduced a 10-month term deposit rate of 1.75% on deposits of $5,000 to $2 million |
| Westpac, Bank of Melbourne, BankSA and St. George | – Special 12-month term deposit rate of 1.70% on deposits from $5k to $500k
– For Australians aged 65+, the rate will be 2.00% for 8 months on deposits from $5k to $500k |
Other banks
| Bank | Rate change |
| AMP | Increased term deposit rates to 1.65% for amounts less than $25,000, and 1.85% for amounts more than $25,000. Applies to 6-month to 18-month term deposits. |
| Arab Bank | – Increased 3-month term deposit rates by 15 basis points to 1.7% ($2k-$50k) and 1.8% ($50k-$500k)
– Increased 6-month term deposit rates by 10 basis points to 1.8% ($2k-$50k) and 1.9% ($50k-$500k) |
| Auswide Bank | – Increased 12-month term deposit rates to 1.75% for deposits $5k+ |
| Bank of Queensland | – Increased 6-month and 9-month by 15 and 70 basis points respectively to 1.75% |
| Bank of us | Increased 12-month term deposit rates:
– to 1.50% for balances $5k to $25k – to 1.60% for balances $25k to $100k – to 1.70% for balances $100k to $200k |
| Bankwest | – Increased 12-month online term deposits to 1.70% (available for a limited time only) |
| Bendigo and Adelaide Bank | – Increased 5-month term deposit rates to 1.25% (for $5k-$5m)
– Increased 12-month term deposit rates to 1.35% (for $5k-$5m) |
| Beyond Bank | – Increased 6-month term deposit rates to a maximum of 1.50%, depending on amount
– Increased 9-month and 12-month term deposit rates to a maximum of 1.45%, depending on amount |
| BCU | – Increased 3-month term deposit rates to a maximum of 1.70% (for $1k – $1m) |
| Circle Alliance | – Increased 5-month term deposit rates to 1.25% (for $5k-$25k)
– Increased 12-month term deposit rates to 1.35% (for $5k-$25k) |
| Citibank | – Increased 3-month or 6-month term deposit rates to 1.90% for balances of $250k – $2m
– Increased 3-month or 6-month term deposit rates to 1.80% for $10k – $249,999 balances |
| Credit Union SA | – Increased 3-month term deposit rate by 10 basis points to 1.6% |
| Defence Bank | Increased to the following:
– 4-month term deposits to 1.65%
– 8-month term deposits to 1.75% |
| First Choice | – Increased 9-month term deposit rates to 1.35%
– Increased 12-month term deposit rates to 1.65% |
| Firstmac | – Increased 60-day term deposit rates to 1.00%
– Increased 12-month term deposit rates to 1.95% (interest at maturity) and 1.85% (monthly interest) – Increased 24-month term deposit rates to 1.70% (interest at maturity) and 1.60% (monthly interest) |
| Greater Bank | – Increased 3-month term deposit rates to 1.35% (for balances of $5k – $50k+)
– Increased 12-month term deposit rates to a maximum of 1.75%, depending on amount – Increased 24-month term deposit rates to a maximum of 1.85%, depending on amount – Increased 36-month term deposit rates to a maximum of 1.90%, depending on amount – Increased 48-month term deposit rates to a maximum of 1.95%, depending on amount – Increased 60-month term deposit rates to a maximum of 2.00%, depending on amount |
| G&C Mutual Bank | – Increased 12-month term deposit rates to 1.70% |
| Heritage Bank | – Increased 5-month term deposit rates by 15 basis points to 1.70% (for balances of more than $1k) |
| HSBC | – Increasing 12-month term deposit rates by 30 basis points to 1.80% |
| Hume Bank | – Increased 12-month term deposit rates by 45 basis points to 1.60% (for balances above $5k) |
| ING | – Increasing 6-month and 9-month term deposit rates to 1.80%
– Increasing 12-month and 24-month term deposit rates to 1.85% |
| Macquarie Bank | – Increasing rates for 12-month retail term deposit products to 1.75%. |
| ME Bank | – Increasing 6-month term deposit rate to 1.80%
– Increasing 12-month term deposit rate to 1.80% |
| MOVE Bank | – Increased 12-month term deposit rate to 1.75% |
| MyState Bank | – Increased 8-month term deposits to 1.35%
– Increased 12-month term deposits to 1.85% |
| Northern Inland CU | – Increased 12-month term deposits to 1.75% |
| P&N Bank | – Increased 3-month term deposit rates to 1.70% ($5k – $1m) |
| Qudos Bank | – Increased all new 3 to 12-month fixed rate term deposit rates to 1.80% |
| Queensland Country Bank | – Increased 4-month term deposit rates to 1.65% ($5k – $1m)
– Increased 9-month term deposit rates to 1.75% ($5k – $1m) |
| Rabobank | – Increased 12-month term deposit rate to 2.00% |
| RACQ | – Increased 6-month term deposit rate to 1.65% and 12-month rate to 1.75% (for balances above $1k) |
| Rural Bank Limited | – Increased 5-month term deposit rate to 1.30% (for balances above $5k) and 0.35% (for $500 – $4999)
– Increased 12-month term deposit rate to 1.40% (for balances above $5k) and 1.25% (for $500 – $4999) |
| Rural Bank One | – Increased 12-month online term deposit rate to 1.45% |
| SERVICE ONE Alliance Bank | – Increased 5-month term deposit rate to a maximum of 1.25% (for deposits of more than $5k) |
| Southern Cross Credit Union | – Increased 12-month term deposits to 1.80% ($100k+) and 1.75% ($5k-$99,999)
– Increased 5-month term deposits to 1.70% ($100k+) and 1.65% ($5k-$99,999) |
| Summerland Credit Union | – Increased 3-month term deposits to a maximum of 1.60%, depending on amount
– Increased 6-month term deposits to a maximum of 1.65%, depending on amount – Increased 9-month term deposits to a maximum of 1.85%, depending on amount |
| Suncorp | – Increasing term deposits between 6 months and 12 months to 1.70% |
| The Mutual | – Increasing 9-month, 10-month and 11-month term deposits to 1.70% (for amounts over $100k)
– Increasing 12-month term deposits to 1.75% (for amounts over $5k) – Increasing 24-month term deposits to 1.85% (for amounts over $5k) and 1.25% (for $1k – $4999) – Increasing 36-month term deposits to 1.90% (for amounts over $5k) and 1.30% (for $1k – $4999) |
| UBank | – Increased 9-month term deposit rate to 1.70% |
*Source: RateCity database. Information accurate as of April 15, 2020. Some products may have minimum balance requirements or other prerequisites, please check with the provider before making any decisions.
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