Select savers get a boost as CBA and Westpac announce RBA responses

Australia’s two biggest banks, CBA and Westpac, have today confirmed they will pass on the 0.25 percentage point hike to variable mortgages. However, CBA has upped the ante by announcing it will increase one of its savings rates by triple this.

CBA will increase the maximum ongoing rate on its bonus saver account, GoalSaver, by 0.75 percentage points to 4 per cent for new and existing customers. However, the bank is not increasing the rate on its popular NetBank Saver account, which currently has an ongoing rate of just 1.60 per cent.

Westpac will also lift the rate on its bonus saver account, Life, to 4 per cent – a 0.25 percentage point increase. The bank is also lifting the rate on its eSaver account, however, the ongoing rate remains at just 0.85 per cent.

Macquarie Bank has also today made its RBA announcement. The bank will increase variable mortgages by 0.25 percentage points. However, the ongoing rate on its savings account will increase by just 0.10 percentage points to 3.80 per cent, with no change to its introductory rate of 4.50 per cent for the first four months.

Currently there are 15 banks offering a rate over 4 per cent for all adults, however, this is likely to increase as more banks apply their own hikes.

CBA savings rate changes – effective 10 February

Source: RateCity.com.au. Note: conditions and balance caps apply for maximum rate on select accounts.

Westpac savings changes – effective 21 February

Source: RateCity.com.au. Note: conditions and balance caps apply for maximum rate on select accounts. 

How much have the big banks passed on to savers since 1 May 2022?

As a result of today’s announcements, CBA’s GoalSaver and Westpac’s Life accounts will have risen by 3.75 percentage points since 1 May 2022, which is 0.50 percentage points more than the cash rate hikes.

However, the ongoing rates on all four big banks’ online saver acccounts remain alarmingly low, with CBA’s NetBank offering 1.60 per cent, NAB’s iSaver offering 1.10 per cent, Westpac’s eSaver 0.85 per cent and ANZ’s Online Saver offering a paltry 0.60 per cent.

Big bank savings accounts – now and then

Source: RateCity.com.au. Note CBA rates are effective 10 February, ANZ rates are effective 14 February and Westpac rates are effective 21 February.

RateCity.com.au research director, Sally Tindall, said: “CBA’s GoalSaver customers are in for the shock of their lives when they find out the bank is passing on a triple hike to their rate.”

“CBA GoalSaver customers are about to find out what a relatively competitive interest rate can do to their nest egg,” she said.

“It’s amazing what a bit of heat from an impending ACCC inquiry can do.

“While CBA, Westpac and ANZ will all soon be offering maximum ongoing rates of 4 per cent, they’re not handing these deals out to all savings customers.

“The big banks’ existing online saver customers have, once again, missed out as the banks keep their rates in the doldrums. 

“If you’ve got cash sitting in a big four bank, don’t just assume your rate has gone up in line with the RBA. If your bank is paying you less than 4 per cent by the end of this month then it’s time to break up with them.

“Mortgage customers will soon be feeling the heat, after the ninth rise to their mortgage rate in less than a year.

“This could be the hike that breaks the bank for some families, particularly those who overstretched themselves recently to get into an overheated property market.

“Banks stress test a new borrower’s finances to make sure they can still make the monthly repayments if rates rise by 3 percentage points, a buffer that was increased in late 2021. However, we’re well over this threshold now, with at least two more RBA hikes coming down the line. For some households, it could be the final straw.

“If you think you’ll have trouble making your monthly mortgage repayment, pick up the phone and talk to your bank now while you still have multiple options.

“The National Debt Helpline is also a great place to get some free, independent financial advice to help you weigh up your next steps,” she said.

CBA variable rate changes for owner-occupiers – effective 17 February

Source: RateCity.com.au. Repayments are for an owner-occupier paying principal and interest with a $500,000 loan over 25 years. An LVR of 70% applies to CBA’s lowest variable rate.

Westpac variable rates for owner-occupiers – effective 21 February 

Source: RateCity.com.au. Repayments are for an owner-occupier paying principal and interest with a $500,000 loan over 25 years. 

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