Rate cuts will continue to hit the savings hip pocket.
Rate cuts will continue to hit the savings hip pocket.

Tough time ahead as banks slash saving rates

ANOTHER of the big four Australian banks has announced a drop in savings account interest rates.

ANZ is the latest to drop by 0.10 per cent. This decision follows Westpac's drop of the same amount, announced last Friday.  

Ratecity.com.au research director Sally Tindall said banks are lowering rates ahead of an expected further cut to the cash rate, which could come as soon as next week.

"ANZ and Westpac customers will now find it just that little bit harder to squeeze any sort of interest out of their bank," Ms Tindall said.

"In many cases, ANZ customers are earning ongoing rates of just 0.10 per cent on their standard savings accounts, which makes them little more than a safe place to park your money."

"ANZ customers with a conditional savings account can get up to 1.85 per cent interest, but if they forget to meet the banks terms and conditions, it drops to as little as 0.01 per cent.

"Savers around the country are doing it incredibly tough, and for many its enough to throw their hands up in the air."

Ratecity.com.au reports the standard savings accounts are currently -  

  • ANZ - ongoing rate of 0.10%, introductory rate of 1.85%, term three months.
  • CBA - ongoing rate of 0.15%, introductory rate of 2%, term five months.
  • NAB - ongoing rate of 0.11%, introductory rate of 2.11%, term four months.
  • Westpac - ongoing rate of 0.15%, introductory rate of 1.91%, term five months. 

Ms Tinndall recommends that shopping around for a better rate is still worth the effort.

"RateCity.com.au's database shows some banks are still willing to offer ongoing rates of up to 2.50 per cent," she said.

"Two of the banks offering ongoing rates of 2.50 per cent are neo banks, which suggests it could pay to look outside the box.