8 banks increase savings rates beyond the RBA hikes – could rates hit 4%?

While a third of Australian households feel the heat under the weight of rising mortgage rates, savers are finally enjoying a decent boost from the cash rate hikes.

If the RBA hikes by another 0.50 percentage points this afternoon, the highest ongoing savings rate could potentially climb over 4 per cent. The market leading ongoing rate is currently 3.6 per cent – the highest rate we’ve seen in seven years.

RateCity.com.au database analysis:

• 8 bankshave raised at least one savings account rate beyond the 1.75% of RBA hikes since May, including ANZ, Bank of Queensland, Suncorp and Virgin Money
• 15 banks now have at least one ongoing savings account rate above 2.5%.
• 61% of banks have hiked at least one savings rate by the full 0.50%-point RBA hike in August.
• 3.60% is currently the highest ongoing savings rate from Virgin Money.
• 4.00% is currently the highest 2-year term deposit rate from AMP and Judo.

RateCity.com.au research director, Sally Tindall, said: “Some banks are now actively chasing after savers by offering some of the highest interest rates we’ve seen in years.”

“Since the rate rises began in May, eight banks have hiked savings rates beyond the RBA, hoping to attract new business,” she said.

Australians have a record $1.29 trillion in household deposits, according to the latest APRA statistics.

“The banks have never had so much cash, but it seems some still want more. Mortgage funding costs are on the rise, making deposits an increasingly important part of the funding mix,” she said.

“That’s why the lowest rate home loan providers are now primarily banks, rather than the non-bank lenders we’ve grown used to.

“The good news is savers are back to being a sought-after commodity after years of lousy returns, but they’ll still need to shop around if they want to get the best deals.

“Don’t automatically assume the bank will lift your savings rates by the full RBA hike. Banks are still picking and choosing which customers get the biggest boost.

“For example, ANZ’s Online Saver customers are paying a whopping great complacency tax, if they haven’t yet switched to the bank’s Plus Saver account, which is paying 2.1 percentage points more in interest.

“Savers willing to lock up their money in a term deposit can now get rates up to 4 per cent, if they’re willing to commit for two years. That’s more than three times what was on offer just a year ago,” she said.

BONUS SAVERS – market leaders for all adults

Source: RateCity.com.au. Conditions for max interest rate apply.

Highest term deposit rates: $50,000

Source: RateCity.com.au

Big four banks – BONUS SAVERS

Source: RateCity.com.au. Conditions for max rate apply.

Big four banks – ONLINE SAVERS

Source: RateCity.com.au.

Compare savings accounts