Lenders’ festive bash for savers
BANKS have hit cash savers in a Grinch move to cut interest rates just weeks from Christmas.
The rate cuts are tipped to cost savers millions of dollars a year and come at a time when many households are burdened with soaring expenses during the Christmas and New Year period.
Analysis by financial comparison website Mozo revealed that since the start of November several of the big banks — including National Australia Bank and ANZ — are among those to have dropped some savings account interest rates.
NAB dropped their Reward Saver’s conditional bonus rate by 0.05 per cent to 2.5 per cent, while ANZ reduced their Online Saver’s base rate by 0.2 per cent to 0.8 per cent.
A base rate is the amount of interest a customer earns each month when they don’t meet the conditions for a bonus rate.
A bonus rate applies when the customer sticks to the withdrawal and deposit conditions specified for the account.
And just this week Westpac-owned lender RAMS dropped their saver account’s conditional base rate by 0.2 per cent to 2.8 per cent.
Online bank ING’s Savings Accelerator base rate has fallen by 0.15 per cent to 1.35 per cent.
Mozo spokeswoman Kirsty Lamont (pictured) said the cuts will hit older Australians the hardest because so many of them rely on interest returns.
“It’s a very unwelcome Christmas present for the nation’s savers,” Ms Lamont said. “This is a sneaky time of the year to cut rates because most Australians are preoccupied with Christmas shopping.
“We’ve seen the rates slashed on some of the nation’s most popular savings accounts and that’s going to cost savers millions of dollars in lost interest.”
Ms Lamont urged savers to hunt for more competitive interest rates and “move money to an account that is paying a decent rate”.
The Reserve Bank of Australia board kept the cash rate on hold at 1.5 per cent this year and savings interest rates have remained at low levels — about 2 or 3 per cent for several years now.
Tribeca Financial chief executive Ryan Watson urged customers to actively seek better savings interest rate deals.
“Banks as a rule take their existing clients for granted; when cash interest rates drop, it is time for consumers to start shopping around,’’ he said. “Challenging your existing bank with comparative cash rates you have sourced from alternate providers will force your bank to provide you with a better deal.”