Major Aussie bank cuts interest rates on savings accounts: New conditions leave savers scrambling
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In a significant move that may impact savers, a major bank has announced cuts to interest rates on its customers' savings accounts.
This change comes with new conditions that customers must meet to retain their current rates, raising concerns among account holders about the implications for their savings.
As the financial landscape continues to evolve, customers are urged to stay informed about these developments and consider their options carefully.
ANZ, one of Australia's big four banks, has made a significant change to the interest rates on its Plus Save accounts.
This decision comes at a time when Australians are already grappling with a cost of living crisis, making it harder for many to put money aside in savings.
Previously, ANZ offered an ongoing rate of 4.9 per cent on these accounts, but this has now been slashed to a mere 0.5 per cent unless customers can meet a new condition: growing their balance by at least $100 each month.
For those who can meet this requirement, a bonus of 4.5 per cent will be added, bringing the maximum ongoing rate to an attractive 5 per cent.
This change by ANZ follows a similar strategy by Westpac last month, which saw a reduction in its base rate by 0.15 per cent and a corresponding increase in its bonus rate.
As a result, Westpac Life customers can still earn a maximum rate of 5 per cent, but again, only if they increase their balance monthly.
The Australian Competition and Consumer Commission has found that approximately 71 per cent of bonus interest accounts fail to earn bonus interest in any given month.
This statistic highlights the challenge many customers face in meeting the conditions required to benefit from higher interest rates.
Laine Gordon, the Money Editor at RateCity.com.au, described ANZ's move as a double-edged sword for savers.
‘People who can squirrel away an extra $100 or more each month into their ANZ Plus Save account will be rewarded with a rate hike,’ she said.
‘Others who can’t squeeze any extra savings from their budget, however, will see their savings goals take a major hit.’
‘Keen savers can now get ongoing rates of 5 per cent or even higher; however, customers would do well to read the fine print.’
‘The majority of these high-interest accounts are riddled with specific conditions that can send your monthly interest into a black hole the moment you miss a step,’ Ms Gordon added.
Ms Gordon advised individuals to seek a savings account that suits their financial situation.
‘If the monthly terms and conditions are hurdles you can’t jump easily, then look for something that better suits your lifestyle,’ she recommended.
Canstar.com.au's research over the last three months has shown a trend of decreasing savings rate structures, with 12 accounts experiencing cuts and only 3 seeing increases.
Sally Tindall, Canstar's Data Insights Director, noted that while some ANZ customers will earn more interest with the new terms, those who cannot meet them will see their interest rates plummet.
‘ANZ Plus launched this “no strings attached” account back in early 2022, attracting savers who were tired of jumping through hoops to qualify for the maximum rate,’ she said.
‘This change today would have ruffled a few feathers among its current customer base.’
Ms Tindall mentioned that while most high-interest savings accounts have certain requirements to qualify for the maximum rate, there is still one bank providing an ongoing rate above 5 per cent without any monthly conditions, along with three other banks offering rates of 4.75 per cent or higher.
‘Bonus saving rate schemes are a game you need to play with a close eye on the rules,’ she stated.
‘For keen savers who can meet any regular conditions with their eyes shut, this type of account might be up their alley.’
‘However, if you’re a haphazard saver or someone who hates staying on top of the rules, it could well be worth putting your savings into a different field altogether.’
‘What’s important is to work out which type of account will fit with your savings habits, then spend time looking for one offering a competitive rate,’ Ms Tindall added.
ANZ has been reached out to for a comment.
Have you been affected by the rate cut? How do you plan to adapt your savings strategy? We invite you to share your experiences and thoughts on these changes in the comments below. Let's discuss and support each other in navigating these financial waters.
This change comes with new conditions that customers must meet to retain their current rates, raising concerns among account holders about the implications for their savings.
As the financial landscape continues to evolve, customers are urged to stay informed about these developments and consider their options carefully.
ANZ, one of Australia's big four banks, has made a significant change to the interest rates on its Plus Save accounts.
This decision comes at a time when Australians are already grappling with a cost of living crisis, making it harder for many to put money aside in savings.
Previously, ANZ offered an ongoing rate of 4.9 per cent on these accounts, but this has now been slashed to a mere 0.5 per cent unless customers can meet a new condition: growing their balance by at least $100 each month.
ANZ has slashed the ongoing interest rate on Plus Save accounts from 4.9 per cent to 0.5 per cent. Credit: Shutterstock
For those who can meet this requirement, a bonus of 4.5 per cent will be added, bringing the maximum ongoing rate to an attractive 5 per cent.
This change by ANZ follows a similar strategy by Westpac last month, which saw a reduction in its base rate by 0.15 per cent and a corresponding increase in its bonus rate.
As a result, Westpac Life customers can still earn a maximum rate of 5 per cent, but again, only if they increase their balance monthly.
The Australian Competition and Consumer Commission has found that approximately 71 per cent of bonus interest accounts fail to earn bonus interest in any given month.
This statistic highlights the challenge many customers face in meeting the conditions required to benefit from higher interest rates.
Laine Gordon, the Money Editor at RateCity.com.au, described ANZ's move as a double-edged sword for savers.
‘People who can squirrel away an extra $100 or more each month into their ANZ Plus Save account will be rewarded with a rate hike,’ she said.
‘Others who can’t squeeze any extra savings from their budget, however, will see their savings goals take a major hit.’
‘Keen savers can now get ongoing rates of 5 per cent or even higher; however, customers would do well to read the fine print.’
‘The majority of these high-interest accounts are riddled with specific conditions that can send your monthly interest into a black hole the moment you miss a step,’ Ms Gordon added.
Ms Gordon advised individuals to seek a savings account that suits their financial situation.
‘If the monthly terms and conditions are hurdles you can’t jump easily, then look for something that better suits your lifestyle,’ she recommended.
Canstar.com.au's research over the last three months has shown a trend of decreasing savings rate structures, with 12 accounts experiencing cuts and only 3 seeing increases.
Sally Tindall, Canstar's Data Insights Director, noted that while some ANZ customers will earn more interest with the new terms, those who cannot meet them will see their interest rates plummet.
‘ANZ Plus launched this “no strings attached” account back in early 2022, attracting savers who were tired of jumping through hoops to qualify for the maximum rate,’ she said.
‘This change today would have ruffled a few feathers among its current customer base.’
Ms Tindall mentioned that while most high-interest savings accounts have certain requirements to qualify for the maximum rate, there is still one bank providing an ongoing rate above 5 per cent without any monthly conditions, along with three other banks offering rates of 4.75 per cent or higher.
‘Bonus saving rate schemes are a game you need to play with a close eye on the rules,’ she stated.
‘For keen savers who can meet any regular conditions with their eyes shut, this type of account might be up their alley.’
‘However, if you’re a haphazard saver or someone who hates staying on top of the rules, it could well be worth putting your savings into a different field altogether.’
‘What’s important is to work out which type of account will fit with your savings habits, then spend time looking for one offering a competitive rate,’ Ms Tindall added.
ANZ has been reached out to for a comment.
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