As Aussies diligently tuck away their hard-earned dollars in a savings account, they hope for a nest egg that could let them retire stress-free.

However, customers of one of Australia’s major banks may have to brace themselves for some changes soon.


National Australia Bank (NAB) recently trimmed the interest rate on its popular Reward Saver account, marking a double whammy for customers.

What happened, and how can customers make sure that their savings are still working hard for them?

NAB reduced the maximum interest rate on its Reward Saver account by 0.05 per cent, bringing it down to 4.35 per cent.


Last May, the bank had a more significant 0.25 per cent cut, making for a total reduction of 0.30 per cent in a few weeks.

While a 0.05 per cent drop might sound minor, it’s part of a broader trend for savings rates across the board.

According to financial comparison platform Canstar, banks like ING and Rabobank have also been trimming their rates, with some slashing even more than the Reserve Bank of Australia’s (RBA) own cash rate cuts.

If the RBA only made a small cut, why are banks slashing rates even further?


First, banks anticipate future RBA moves and adjust their rates accordingly, sometimes even before the official announcement.

Banks also don’t always need a cash rate change to move the goalposts for customers.

However, the rate cut has garnered polarising opinions.

‘It’s a small move but a disappointing one nevertheless,’ Sally Tindall, Canstar’s Data Insights Director, shared.

The average ongoing savings rate on Canstar’s database is at 3.07 per cent, far from the previous five per cent rate.

NAB is predicting that the RBA will cut interest rates again in July, August, and November.

With these predictions, the cash rate could go down to 3.10 per cent.

Other major banks like CBA and ANZ expect two more cuts in this cycle.


Where to find high savings rates

For the best possible returns, customers still have a few options on where to put their hard-earned money.

The BOQ Future Saver account offers a market-leading 5.10 per cent rate, but it’s only available to customers aged 14 to 35.

Plus, you’ll need to deposit at least $1,000 each month and make five transactions in a linked account to qualify.

Other accounts currently offering 5 per cent or more include:

• BCU Bank Boss Saver
• P&N Bank Savvy Saver
• Westpac Life Spend&Save
• Move Bank Growth Saver
• ING Savings Maximiser

However, these rates are subject to change.

It pays to read the fine print and make sure you can meet the conditions before switching.

What about term deposits?

For those who prefer the certainty of a fixed rate, term deposits have also been an option.

However, more than 50 banks have cut at least one term deposit rate in the past month, including the Big Four major banks.

According to Canstar, term deposit rates are falling even faster than at-call savings rates.

With rates on the slide, it’s essential to check options when it comes to banks and savings accounts.

It’s also a good time to review your overall savings strategy, so sit down with a trusted financial expert to see your options.
Are you feeling the pinch from falling savings rates? Have you switched banks recently, or are you sticking it out with your current provider? We would love to hear your thoughts about this news in the comments section below!

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