ANZ reduces savings and term deposit interest rates

ANZ has shaved rates on some of its savings and term deposit accounts, as savers continue to feel the pinch from low interest rates.

Term deposit holders are likely to be hit harder, with bigger interest rate cuts made to the big four bank’s term deposit accounts than its savings accounts.

ANZ trimmed 15 basis points off two of its main savings accounts: the ANZ Progress Saver and the ANZ Online Saver.

The new maximum rate for the ANZ Progress Saver is 0.70 per cent, while for the ANZ Online Saver, it is 0.65 per cent.

ANZ Progress Saver

Note: To qualify for the maximum rate you need to make at least one single deposit of $10 or more in a month.

ANZ Online Saver

The bank also reduced its interest rates by up to 25 basis points on two of its term deposit accounts.

The ANZ Advance Notice Term Deposit has been slashed by between five and 25 basis points. 

The biggest cuts were made to the product’s three-month term option, now with an interest rate of 0.40 per cent.

On the ANZ Term Deposit, rates were lowered by up to 10 basis points. 

Parking money in this product’s 24- to 48-month term options have a return of 0.35 per cent, while the 60-month term deposit offers a 0.45 per cent rate.

Savings and term deposit rates plummet

ANZ’s changes, effective today, bring the average ongoing savings rate to 0.51 per cent, according to the RateCity database.

As mortgage rates continue to fall, banks continue to take an axe to their savings and term deposit rates.

While the highest ongoing savings rate six months ago was 2 per cent, today that has dropped to 1.60 per cent.

Contributing to this fall, 67, including all of the big four, have reduced its savings rates in the past two months by an average of 17 basis points.

And it’s not just savings account holders who are suffering. Savers locking away their funds in a term deposit are also seeing their returns slashed.

More than 80 banks have cut its term deposit rates in the past two months, with an average reduction of 12 basis points.

Big four banks chip away at rates for savers

About three quarters of household deposits are with a big four bank, according to the Australian Prudential Regulation Authority.

The big four banks have been chipping away at their main savings accounts over the past six months through a series of small cuts. 

Savers holding a standard savings account with a major bank are earning an ongoing rate of as low as 0.05 per cent, while big four customers with a conditional based savings account can earn up to 0.90 per cent.

The one exception is Westpac, which is offering a max rate of 3 per cent to Australians aged between 18 and 29 years of age. 

On average, the four major banks have lowered its savings rates by almost 10 basis points in the past two months, RateCity records showed.

Westpac Group shaved its savings rates in early September by up to 20 basis points across its subsidiaries, including St. George, BankSA, Bank of Melbourne and RAMS. 

More recently, Commonwealth Bank trimmed savings rates across its Youthsaver and Netbank Saver accounts by five basis points. 

All of the big four banks also lowered its term deposit rates in the past two months, by an average of close to 10 basis points.

Big 4 conditional savers over the last 6 months

Source: RateCity. Notes: based on a balance of $50K. Does not include accounts with age restrictions. Westpac offers a max rate of 3% to people aged 18 - 29 years old.

Highest ongoing savings rates

Source: RateCity. Note: Accurate as of October 13, 2020.

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