Westpac cuts savings rates as CBA continues to hold out (for now)

Australia’s second largest bank, Westpac, has today reduced their savings rates by up to 0.20 per cent.

This comes on the back of savings rate cuts from NAB and ANZ last Friday. CBA is the only big bank that hasn’t cut savings rates following the July RBA cash rate cut.

Westpac eSaver

Effective today, Westpac has cut the ongoing rate on its eSaver account by 0.15 per cent. The eSaver account now gives you 2.16 per cent interest for the first 5 months, then an ongoing rate of just 0.15 per cent.

Westpac Life

Also, effective today, Westpac has cut the base rate on its Life account. However, it has taken the unusual step of increasing the bonus rate by the same amount. As a result, customers who make one deposit a month, and end the month with a higher balance than they started with, will still continue to receive the same maximum rate.

RateCity.com.au research director Sally Tindall said today’s changes from Westpac were a mixed bag.

“This is a surprising move from Westpac today. Customers with an eSaver will be bitterly disappointed to find out they’ll be earning just 0.15 per cent interest on their savings on an ongoing basis.

“Westpac customers who are regular savers have been rewarded. Customers who can make one deposit a month and keep building up their savings balance will get the same maximum rate. This is a pretty big olive branch in what is an otherwise hostile environment for savers.

“Westpac has bucked the trend today, passing on smaller rate cuts to savers on their main two savings accounts than to their home loan customers.

“All eyes are now on CBA to see what cuts they’ll make to their savings accounts. As the nation’s biggest bank, savings account holders are waiting with bated breath.

“Savings accounts aren’t as straight forward as they used to be. There are plenty of terms and conditions to trip you up but with ongoing savings rates as high as 2.75 per cent, this is a good time to check whether you’ve got the right account for your finances,” she said.

Some of the highest savings account rates on RateCity.com.au

HOW THE BIG BANKS SAVINGS ACCOUNTS CURRENTLY STACK UP

Big four savings accounts – conditional rates

*For balances under $50K. CBA offers higher rates for higher balances. Note CBA is yet to move savings rates post the July cash rate cut.

Big four savings accounts – introductory rates

Note: CBA is yet to announce changes to its savings accounts, post the July cash rate cut.

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