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ANZ makes major interest rate move for savers: ‘Be prepared’

The move marks the first online savings rate cut from a Big Four bank since November last year.

Tamika Seeto
·Finance Reporter
·4-min read
ANZ
ANZ has cut interest rates on its popular Online Saver account, which means existing customers will be paid less. (Source: Getty)

ANZ has cut the base rate on its popular online savings account in a “strategic” push. An expert has warned savers to “be prepared” for more changes as we edge closer to the Reserve Bank of Australia (RBA) cutting interest rates.

ANZ lowered the base rate of its Online Saver by 0.10 per cent to 1.40 per cent on Friday, while hiking the introductory rate by 0.10 per cent to 2.25 per cent. This means the maximum savings rate will remain at 3.65 per cent for new customers, however, it will only apply for the first three months with existing customers paid the new, lower base rate.

Mozo personal finance expert Rachel Wastell told Yahoo Finance this marked the first online savings rate change by a Big Four bank since the RBA hiked the cash rate in November last year.

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“At call savings rates (online savings rates) typically stay stable until we're closer to an RBA rate cut, or one occurs, so we haven't seen as much movement in those compared to term deposits,” Wastell said.

“However, savers should be prepared for more changes to savings rates in the near future.”

AMP Bank also cut 0.2 per cent off its AMP Saver bonus rate on Friday, Mozo data revealed, dropping the maximum rate from 5.40 to 5.20 per cent.

Unity Bank, another rate leader in the savings space, dropped the rate on its MoneyMAX account today by 0.05 per cent to 4.70 per cent. Despite the cut, the bank is still offering the sixth highest unconditional base savings rate.

Do you have a story to share? Contact tamika.seeto@yahooinc.com

“Apart from ANZ, the cuts coming through look to be rate leaders shifting rates down while still remaining competitive,” Wastell said.

“Once the RBA cuts, there will likely be a number of banks cutting savings rates in response, so banks with less competitive rates may hold off on cuts until that first RBA cut comes through.

“Aussies with their savings in a leading online savings account should be checking their rate to see if it's moved, especially as we could see more rate leaders shifting rates down as we get closer to an RBA cut.”

Wastell said ANZ’s savings cut appeared to be part of a “strategic move” to attract more customers to its online ANZ Plus products.

From October 1, the ANZ Plus Save account will offer a 0.5 per cent base rate and 4.50 per cent bonus rate, meaning customers can earn 5 per cent in total. The bank's new ANZ Plus Flex Saver will offer a 5 per cent base rate for balances up to $5,000.

It comes as all of the Big Four banks make cuts to their term deposit rates.

CBA cut the rate on almost all its term deposits by up to 0.50 per cent, with NAB followed by the same amount and ANZ lowered rates by up to 0.80 per cent. Westpac was the last to cut, lowering rates by up to 0.40 per cent.

Wastell said banks were doing this to avoid being “locked into paying higher rates for longer periods”.

“​​Essentially - it's all about timing. Banks are being cautious and mitigating risk, because if they lock in savers with too high rates now, they could end up overpaying when rates start to fall,” she told Yahoo Finance.

“Savings rates are more flexible, as these rates can be changed at any time, but with term deposits, banks commit to paying savers interest over the entire term.

“That's why there is less urgency to adjust savings rates and more of a focus on cutting those longer-term term deposit rates.”

Here are the top 5 high-interest savings accounts right now, including those with introductory offers or bonus conditions:

  1. Rabobank High Interest Savings Account: 5.75 per cent for the first 4 months

  2. ME HomeME Savings Account: 5.5 per cent when you deposit $2,000 and grow balance

  3. ING Savings Maximiser: 5.5 per cent when you deposit $1,000, grow your balance and make 5 card purchases with linked account

  4. MOVE Bank Growth Saver: 5.5 per cent when you deposit $200 and make no withdrawals

  5. Ubank High Interest Save Account: 5.5 per cent when you deposit $500

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