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ANZ’s surprise blow for Aussie customers

ANZ has slashed the interest rate on its online savings account.

ANZ customers have been dealt a surprise blow today, with the major bank announcing it will slash the interest rate on its basic savings account.

This is the first time in 19 months the major bank has cut the rate on its Online Saver account. It’s also the first time any of the Big Four - CBA, Westpac, NAB and ANZ - has cut an interest rate on savings accounts in this period.

It comes as interest rates remain at a decade high, after the Reserve Bank (RBA) hiked the cash rate from a record low of 0.10 per cent in May last year to 4.10 per cent.

ANZ
ANZ has cut interest rates on its online savings account. (Source: Getty)

From today, ANZ will cut the rate on its Online Saver by 0.10 per cent. This means new customers will be earning 3.30 per cent for the first three months, before the rate drops to just 1.50 per cent.

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RateCity research director Sally Tindall said ANZ’s move was “likely to leave thousands of customers completely stumped”.

“The cash rate has risen by 4 percentage points in the last year and a half. If the RBA moves in the next few months, it is likely to be up, not down, and yet, ANZ is cutting the ongoing Online Saver rate from a paltry 1.60 per cent to an even more ridiculous 1.50 per cent,” she said.

“The one silver lining to a high cash rate is that many savings rates have risen out of the doldrums. That’s not the case for anyone with an ANZ Online Saver, or anyone with a big bank online saver account for that matter.”

While the move was out of the blue, RateCity found more banks were cutting savings rates rather than hiking them. In the past two months, 14 per cent of banks have cut at least one savings rate, while just 8 per cent have hiked.

How does ANZ compare?

While ANZ’s move will be a blow to customers, Westpac still offers the lowest ongoing savings rate out of the Big Four banks. It offers new customers 4.75 per cent for the first five months, before dropping to 1.10 per cent.

ANZ customers can nab a better interest rate by switching to its ANZ Plus account, which offers a 4.65 per cent rate for balances under $250,000, with no conditions.

There are even better rates on offer if you look beyond the major banks, with some as high as 5.65 per cent. But there are often conditions attached, including minimum monthly deposits.

Account

Max ongoing rate

Max balance

Me Bank HomeME

5.65%

$100,000

ING Savings Maximiser

5.50%

$100,000

BOQ Future Saver (ages 14-35)

5.50%

$50,000

MOVE Bank Growth Saver

5.50%

$25,000

Teachers Mutual Bank Target Saver

5.50%

$5,000,000

Great Southern Bank Goal Saver (ages 18 -24)

5.35%

$50,000

Virgin Money Boost Saver

5.35%

$250,000

Source: RateCity

Tindall said “every dollar makes a difference” and urged customers to make sure their savings rate started with a ‘5’ and not a ‘1’.

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