ANZ has hit savers with a rate cut higher than the recent carving issued by the Reserve Bank of Australia at the start of November.
The major bank has sliced the headline savings rates on two of its popular accounts by 20 basis points, making it the latest institution to bow to the low-interest environment being fuelled by the COVID-19 economic downturn.
ANZ’s standard savings account now has a five-month introductory rate of 0.45 per cent before moving to an ongoing rate of 0.05 per cent.
The 20 basis-point hit has also impacted ANZ’s Progress Saver conditional product that now attracts a maximum rate of 0.5 per cent if $10 per month is deposited and no withdrawals are made.
ANZ’s rate carvings is five basis-points higher than the rate cut issued by the central bank at the start of the month.
RateCity research director Sally Tindall said the cuts were a “hard pill to swallow” for savers who are already earning a pittance on saving returns.
“The bank has refrained from cutting its base rates, which is a small blessing, but regular savers who do the right thing to qualify for the maximum rates are going to find their interest has been slashed,” Ms Tindall said
On November 3, the RBA lowered the official cash rate by 15 basis points to 0.1 per cent, which is designed to bring down the cost of borrowing and prompt banks to offer cheaper lending rates to households and businesses.
However, a low-rate environment also forces savings rates south, as interest payable to customers becomes more expensive for banks.
According to RateCity, 30 banks have taken a knife to interest rates since the RBA cut, with the average ongoing savings rate across the banking sector now sitting at 0.46 per cent.
Westpac is advertising the highest conditional savings rate of the big four at 0.75 per cent, while Commonwealth Bank is offering the lowest at 0.45 per cent.
Both Westpac and NAB are advertising the highest introductory rates on standard deposit accounts at 0.75 per cent.
Ms Tindall said it was only a matter of time before NAB and Westpac were forced to drop rates.
“It’s not easy operating in a low-rate environment where profit margins are feeling the squeeze, but there aren’t many winners on the back of this month’s rate cut,” Ms Tindall said.
“Savings rates are under fire, most mortgage customers are unlikely to get relief and credit card rates haven’t moved a muscle.”