Major banks play catch up on high yield accounts
The era of low interest rates on most bank deposits is drawing to a close. The major banks have been resisting raising deposit interest rates for most customers, but are now beginning to buckle. Thanks to customer inertia, the bank’s make easy profits from about $100 billion in transaction accounts that pay next to no interest. Now Citigroup, BankWest, ING and Suncorp Metway are gaining traction with high interest accounts that pay interest rates of between 5 per cent and 5.4 per cent. Westpac has become the first of the majors to respond with a 5 per cent rate of its own on a transaction bank account.