GONE: Westpac slashes market-leading savings rate

·2-min read
Close up of Australian cash, pedestrians in Sydney.
Westpac has reduced savings rates. (Images: Getty).

Westpac has cut savings rates by up to 0.50 per cent, including its popular 3 per cent Life savings account.

The Westpac Life account now offers a maximum 2.50 per cent interest rate for savers aged 18-29. Savers older than this can now access a maximum rate of 0.30 per cent, after the bank cut that rate by 0.10 per cent.

The bank also reduced its maximum introductory savings rate on eSaver accounts by 0.10 per cent. The new maximum rate is 0.30 per cent for the first five months, before it reverts to 0.05 per cent.

Australia’s retirees have also seen a hit: Westpac has cut its Retired account by 0.05 per cent to 0.15 per cent for balances below $250,000. Savers with balances above $250,000 will see a rate cut of 0.10 per cent to a new rate of 0.30 per cent.

(Created with Datawrapper).
(Created with Datawrapper).

The cuts to the Westpac Life account for younger savers effectively ends Westpac’s claim to holding the market-leading rate, with it now offering the same rate as Bank of Queensland’s Fast Track Starter account.

The BOQ rate is also only available to young Australians, including savers 14 to 24.

“The 3 per cent Life Account for young adults has been an outlier in the market, with an interest rate way above any other savings account, and even after the decrease it retains that position,” said Canstar financial services group executive Steve Mickenbecker.

“The savings cuts will disappoint first home savers who are already battling exploding property prices which keep the target moving further away.”

He added that the 0.10 per cent cut for savers older than 29 will also sting, as it comes off the back of two years of falling rates.

WATCH: Three tips to save $1,000 in one year.

RateCity.com.au research director Sally Tindall said it’s a good reminder for Australians to check if they’re getting the best deal available.

She noted that the cut comes despite no move to the Reserve Bank of Australia’s official interest rate since November 2020.

“People need to be shopping around and reading the terms and conditions if they want the highest rates,” Tindall said.

For example, even within Westpac, rates range from 0.05 per cent to 2.50 per cent.

“With record levels of household deposits in the bank since COVID, it’s important to proactively look for a decent rate.”

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