Great news for savers as rates go UP, not down!
The Reserve Bank of Australia has cut the official cash interest rate to a new historic low of 1.5 per cent for August 2016, leading to home loan rate cuts. While borrowers are enjoying lower interest rates, savers have been bracing for lower returns on their deposits. However, in a surprise development, many of Australia’s biggest banks have not cut their savings account and term deposit rates. In fact some savings rates have gone UP!
With official inflation in Australia now around one per cent, savers can actually do well and keep ahead of rising prices by finding a good savings account or term deposit and locking in a great rate.
Which banks are raising saving interest rates?
In a major victory for savers, Australia’s biggest banks have announced that some of their savings and term deposit rates are going up, not down. Rate cuts on savings accounts were expected following the Reserve Bank of Australia’s August rate cut.
1) Australia’s biggest bank, the Commonwealth Bank, has announced that one-year term deposit rates will increase by 0.55 percentage points to 3 per cent. Commonwealth’s two-year term deposit rates will rise to 3.1 per cent and CBA’s three-year term deposit rate is going up to 3.2 per cent.
2) National Australia Bank has announced an increase in interest rates on the NAB eight-month term deposit by a massive 0.85 percentage points, to 2.9 per cent.
3) ANZ has raised one-year term deposit rates by 0.6 percentage points to 3 per cent. ANZ’s two-year term deposit rate is going up by 0.75 percentage points, to 3.2 per cent.
4) Westpac is raising interest rates on its one, two and three-year term deposits. Westpac’s term deposit rates are going up by 0.45 to 0.55 percentage points.
5) Other banks and credit unions are sure to follow the big four and raise rates on term deposits in the next few days and weeks.
How can I get a better rate on my savings?
Whether you are saving for a particular goal or investing in cash for a steady income, getting the best available rate is important, and not hard. Term deposit rates in particular are expected to get more appealing as banks face new stable funding rules. Right now the best one year term deposit rates listed on infochoice are about 3.0 per cent. There are many two year term deposits around the 3.0 per cent range as well. More banks and credit unions are expected to announce rate rises and the best 1 and 2 year term deposit rates are expected to go up to around the 3.2 per cent mark.
Savings rates change regularly. Savers need to actively manage their deposits. Don’t put all your money into one deposit.
Keep on top of the best rates available, at any time and be prepared to move your money to a new bank or credit union.