The only big bank that has FAILED to pass on the rate increase to savers – as homeowners prepare to fork out an extra $700 on their mortgage within a year
- The Commonwealth Bank has so far failed to pass on rate rise to its savers
- RateCity research director Sally Tindall said it was ‘hugely disappointing’
- ANZ, Westpac and NAB will be raising savings rates by 0.25 percentage points
Australia’s biggest bank has so far failed to pass on the latest official interest rate rise on to its everyday savers.
The Commonwealth Bank was the first major lender on Tuesday to announce it had passed on in full the Reserve Bank of Australia’s 0.25 percentage point rate increase to its variable rate home loan borrowers.
But when it came to savings accounts, CBA was the only bank yet to act as of Thursday afternoon.
The other big banks – Westpac, NAB and ANZ – have all increased their bonus savings rates by a quarter of a percentage point.
RateCity research director Sally Tindall said CBA customers had every right to feel upset.
‘This is a hugely disappointing decision from CBA,’ she said.
Australia’s biggest bank has so far failed to pass on the latest official interest rate rise on to its everyday savers. When it came to savings accounts, the Commonwealth Bank was the only bank yet to act as of Thursday afternoon (pictured is a Sydney branch)
‘Savings customers with Australia’s biggest bank have a right to feel ripped off.
‘The bank has offered up nothing for kids, and nothing for regular savers.’
From May 13, NAB’s Reward Saver rate rises to a maximum rate of 0.5 per cent.
Westpac’s Life product will have a 0.5 per cent savings rate from May 17.
ANZ’s Progress Saver account will have a 0.4 per cent rate by May 13.
But the Commonwealth Bank’s GoalSaver stays at 0.25 per cent – the lowest of the major banks.
CBA is instead offering an 18-month term deposit rate of 2.25 per cent, paid annually, for savers with balances of between $5,000 to $2million, from May 13.
This is still lower than the one-year term deposit rates offered by smaller players.
Judo Bank is offering 2.7 per cent, Macquarie Bank has a 2.5 per cent rate while AMP has a 2.45 per cent rate.
These banks offer even better rates for two-year term deposits.
Judo pays out 3.5 per cent at maturity, Macquarie Bank offers 3.3 per cent while AMP Bank pays 3.25 per cent.
The Big Four banks have now all adjusted their interest rate forecasts for 2023 after the RBA on Tuesday raised the cash rate for the first time since November 2010.
RateCity research director Sally Tindall (pictured) said CBA customers had every right to feel upset
The Reserve Bank’s 0.25 percentage point increase was bigger than market expectations of a 0.15 percentage point rise, taking the cash rate to 0.35 per cent – the highest since March 2020 at the start of the pandemic.
This was in response to March quarter inflation data showing an annual increase of 5.1 per cent – the steepest pace since mid-2001 after the GST was introduced.
Westpac and ANZ are now both expecting the cash rate to hit 2.25 per cent by May 2023 for the first since time May 2015.
This will mean seven interest rate rises and would see monthly repayments on a typical $600,000 mortgage climb by $713 from $2,306 to $3,019, as variable rates climb from 2.29 per cent to 4.44 per cent.
NAB is expecting the cash rate to hit 2.6 per cent by August 2024, which would be the highest since August 2013.
A typical borrower under this scenario will see their monthly repayments soar by $839 to $3,145 as variable rates climb to 4.79 per cent.
The Big Four banks have now all adjusted their interest rate forecasts for 2023 after the RBA on Tuesday raised the cash rate for the first time since November 2010 (pictured is a Paddington auction in Sydney)
Ms Tindall said the May RBA rate rise was far from the last.
‘The May cash rate hike is just a taste of what’s to come from the RBA,’ she said.
‘Whether you’re on a variable rate or a fixed loan that’s due to end, get ready to be paying a lot more.’
The central bank hasn’t raised the cash rate seven times in a year since 2009 and 2019 after the Global Financial Crisis.
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