Savings rates offered by the major banks - including CBA, ANZ, NAB and Westpac - should be higher, according to Federal Treasurer Jim Chalmers, and he has asked the Australian Competition and Consumer Commission (ACCC) to investigate.
Federal Treasurer Jim Chalmers has asked the ACCC to investigate the savings rates being offered by the banks, claiming they should be higher than they are.
The gap between the highest and lowest savings rates continues to widen and, while the latest APRA statistics show Australian households currently have $1.33 trillion in the bank – a record high – many savers are still earning less than 1 per cent on their hard-earned cash.
For example, Westpac eSaver customers are currently on an ongoing savings rate of just 0.85 per cent, despite the official cash rate rising by 3 percentage points since last May.
However, Westpac customers with a Life savings account have seen their maximum ongoing interest rate rise by 3.50 percentage points to 3.75 per cent – more than the 3 percentage points prescribed by the Reserve Bank (RBA).
RateCity.com.au research director Sally Tindall welcomed the announcement, saying it was great to see the Government shining a spotlight on “sub-standard savings accounts”.
“After each RBA hike, many banks have been picking and choosing which savings accounts get a boost, and which miss out. An ACCC inquiry will put pressure on banks to start hiking the rates on savings accounts that are trailing behind the competition,” Tindall said.
“It’s ludicrous to think that some accounts are still offering ongoing savings rates below 1 per cent, when the market leaders now have rates over 4.50 per cent. Savings customers should aim for an ongoing rate that’s above the current cash rate, at an absolute minimum. Anyone earning less than this is getting fleeced.”
Tindall said that even switching account types within the same bank could see your savings rate skyrocket overnight.
“ANZ’s Online Saver customers are getting just 0.60 per cent, while the bank is offering Plus Save customers more than six times this amount, at a rate of 3.75 per cent,” she said.
“Take an hour out of your week to put your savings rate under the spotlight and potentially make a change. Banks have done a fantastic job of streamlining their application processes so you’re likely to find you can open a new account within a matter of minutes.
“Before you make a switch, read the fine print to make sure you’re picking an account that suits your lifestyle and your finances. There’s no point opting for an account with a high saving rate if you can’t jump through the hoops required to get the maximum amount of interest on offer.”