Welcome back high interest savings accounts: providers that have hiked savings rates

Good news for Australians trying to earn a return on their savings, the latest cash rate hike from the Reserve Bank of Australia may mean that interest rates on savings accounts could be on the way up again.

Many savings accounts are still offering interest rates close to zero. With the cash rate having increased by 25 basis points, and further hikes expected over the next two years, Australian savers may see their savings grow through interest again.

Three of the four big four banks have announced they will be increasing savings rates for new customers for specific savings accounts. Only CommBank, Australia’s biggest bank, has not announced whether it will be passing on the hike to savers yet.

Savings account providers increasing interest rates

Source: RateCity.com.au. Data accurate at time of publishing, 04/05/2022.

But savers aren’t out of the woods yet. RateCity has recently warned customers to not expect their bank to pass on every cash rate hike in full to their savings account.

Sally Tindall, RateCity research director, said: “ANZ, NAB and Westpac, like other banks, are bursting at the seams with cash. As a result, the banks are unwilling to pass on the hike to all savings customers,” she explained.

RateCity research shows that since Covid-19, the big four banks cut their goal saver rates by an average of 1.27 percentage points, while the RBA cut the cash rate by only 0.65 percentage points.

These out-of-cycle rate cuts mean that savings account interest rates have a long way to go before your hard-earned next egg can compete with inflation.

High interest savings accounts

According to the RateCity database, the highest savings accounts interest rates (for adults) at the moment sit at 1.35% from ING and AMP Bank.

Often to earn a providers’ highest interest rate, customers may have to jump through some hoops and meet conditions, such as making minimum deposits or not dipping into the account.

This can be challenging for customers who have a set and forget mentality with their savings, as you may need to ensure you’re across all the conditions to earn the highest rates.

If you’re shopping around for a high interest savings account, be sure to read the fine print and product disclosure statement to ensure you can meet any conditions required to earn the competitive rate.

• View live updates of who has moved interest rates at RateCity’s RBA rate tracker

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