Aussies are set for a much-needed cash boost, as a number of banks hike their savings rates in the wake of the latest cash rate hike.
The Reserve Bank raised the official cash rate for the eighth month in a row earlier this week, with the 0.25 per cent increase taking the total rate to 3.10 per cent.
Although home loan borrowers are in for higher repayments, it’s not all doom and gloom for Aussie savers.
“It’s showtime for savers looking to maximise their cash, as banks fight it out for their business,” RateCity research director Sally Tindall said.
“Virgin, ING and Bank of Queensland have broken the 4.5 per cent barrier, which is terrific news for keen savers willing to jump through a few hoops in order to get a competitive rate.”
Term deposits are also on the rise, with the highest rate now 4.95 per cent from Judo Bank for savers willing to lock up their cash for five years.
But Aussies shouldn’t automatically assume their cash was benefiting from rising interest rates, Tindall said.
“The Big Four banks’ online saver accounts might have no terms and conditions but they’re offering up next to nothing in return, with ongoing rates ranging from 1.60 per cent, all the way down to just 0.60 per cent in the case of ANZ,” she said.
What are the highest rates?
According to RateCity’s analysis, there are now five banks offering adult savings accounts with an ongoing rate of more than 4 per cent. These are ING, MOVE Bank, Virgin Money, People’s Choice and UBank.
Virgin Money’s Boost Saver account currently has a 4.60 per cent interest rate for balances up to $250,000. But you’ll need to deposit $2,000 per month into a linked transaction account, make at least five transactions and provide 32 days’ notice to access your funds.
ING will increase its popular Savings Maximiser account to 4.55 per cent for balances up to $100,000 from December 13. Savers need to deposit $1,000 per month into a linked account, make five or more transactions and grow their balance each month.
Younger Aussies could save even more with BOQ’s Future Saver account. Aussies aged 14-35 can receive a 4.75 per cent interest rate when they deposit $2,000 a month into a linked account and make five or more transactions. It applies to balances up to $50,000 and the bonus conditions are waived for under-18s.